- The Subhash Garg committee has drafted a bill named “Banning of cryptocurrencies and Regulation of Official Digital Currencies Bill 2019” that seeks to ban all cryptocurrencies and crypto assets in India.
- The committee states that this is being done because of the numerous fraudulent activities and Ponzi schemes uncovered in the last few years
- The bill awaits final voting by the new government that will be elected this may
India has been in the mist about Cryptocurrencies since 2018. Even after 1.5 years of setting up discreet committees that were instated to study the various use cases of cryptocurrencies and regulate the possession of crypto assets the government still wants to ban all cryptocurrencies and crypto assets in India. A local news agency the economic times published an article which stated that the Indian Interdepartmental committee set up under Subhash Chandra Garg in December 2017 has drafted a bill called the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019.”
Government agencies all back the bill
The media agency reported that various government departments like the Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA) have already agreed to the idea of a complete ban on the “Sale, purchase and issuance of all types of cryptocurrency.”
Previously, the Apex court in India had given a four-week deadline for the committee to come up with complete cryptocurrency regulations, the committee had been drafting the bill since 2018 but the result wasn’t a positive one for all the crypto enthusiasts who were hoping that digital currencies would be regulated.
The report also stated that the government seeks to immediately ban cryptocurrencies because of the various fraudulent activities that took place in the last few years. The committee also mentioned that cryptocurrencies were also being used as a means of money laundering and the ban could be achieved under the “Prevention of Money Laundering Act (PMLA)”.
Points of sale deemed largely unreliable and shady
The ministry of corporate affairs in its feedback to the department of economic affairs also pointed out that the purchase of various crypto assets is being conducted by various individuals and fraud companies who claim to provide huge returns on investments and these transactions aren’t transparent and neither can they be categorized under any regulated framework. It said that these were used to “defraud gullible investors”.
Last year the Reserve Bank of India passed a circular that forced banks that are conducting business on Indian grounds, to stop dealing with firms that provide services related to cryptocurrencies. Many exchanges shut down or moved business elsewhere after this. So there were early signs that the Indian government wasn’t too keen on implementing the uses of cryptocurrencies even though there were speculations of the government developing their own cryptocurrency called the Laxmi coin.
The drafted bill suggested that until a law is signed into effect any individual found guilty of any crypto related cases of fraud shall be prosecuted under the Anti-Money Laundering Act (PMLA). As of now, the bill awaits final voting by the new government that will come to power after the elections in May.