Indian Finance Minister Answers Questions on Cryptocurrency Plans and Ban Proposal

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Indian Finance Minister Answers Questions on Cryptocurrency Plans and Ban Proposal

Indian Finance Minister Nirmala Sitharaman has answered some questions on cryptocurrencies in the Rajya Sabha, the upper house of the Indian Parliament. One of the questions is what the government plans to do with the cryptocurrency sector.

Finance Minister Nirmala Sitharaman answers questions on crypto in Parliament

India’s finance minister on Tuesday answered four questions in the Rajya Sabha on crypto-currency trading, including the measures outlined in the Crypto-Currency Finance Bill.

Minister Sushil Kumar Modi asked the Finance Minister whether trading in bitcoin was banned in 2018, which was later overturned by the Supreme Court, whether other cryptocurrencies are still banned and whether illegal trading in cryptocurrencies is still widespread despite the ban.

Finance Minister Nirmala Sitharaman said: Given the risks associated with virtual currencies (VCs), including bitcoins, the Reserve Bank of India (RBI), in a circular dated April 6, 2018, advised all entities under its supervision not to trade in VCs or offer facilitation services to any person or entity to trade or exchange VCs. She confirmed it:

However, the Honourable Supreme Court, in its judgment of 4. March 2020 … The above circular dated April 6, 2018 has been cancelled.

Indian Finance Minister Answers Questions on Cryptocurrency Plans and Ban Proposal

The final question is: When does the government intend to issue strict guidelines in this area that take account of the risks? The Finance Minister then gave a long answer similar to the first part of the answer given by the Minister of State for Finance, Anurag Thakur, last week.

Quoting from the budget speech 2018-2019, Sitharaman said: The government does not consider cryptocurrencies as legal tender or currency and will take all necessary measures to stop the use of these crypto assets to finance illegal activities or in the payment system. The Government will actively explore the use of blockchain technology for application in the digital economy.

She also explained the recommendations of the High Level Interministerial Committee (HLIC) chaired by the Secretary (Economic Affairs) to study the issues related to BCC and propose specific measures in this regard. The committee was headed by Subhash Chandra Garg, who resigned as Chief Minister. The finance minister said the committee in its report had recommended banning all private cryptocurrencies in India except those issued by the state, adding:

The Government will take a decision on the IMC’s recommendations and the draft law, if adopted, will be submitted to Parliament according to the established procedure.

The Indian government has answered a few more questions about cryptocurrencies and what it plans for the sector after listing a bill that will be tabled in the Lok Sabha, India’s lower house. The bill aims to ban cryptocurrencies and create a regulatory framework for the issuance of digital rupees by the central bank, the RBI.

However, the bill has not been made public, leading to considerable confusion about its status and the prohibitions it would contain. Some suggest it is very similar to Garg’s committee proposal.

Last week, Minister of State for Finance Anurag Thakur answered questions in the Rajya Sabha about the government’s stance on cryptocurrencies and the digital rupee. He answered more questions on cryptocurrencies on Tuesday and confirmed that the bill on cryptocurrencies is in the works and will be sent to the cabinet soon.

What do you think of the finance minister’s comments on cryptocurrencies? Let us know your comments in the section below.

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