The Minister for State for Finance of India has said that currently there is no law in the country that explicitly bans the use of cryptocurrencies in the country, according to a local media report.
Mr. Anurag Thakur, the State Minister for Finance, made his statement during a session of the Indian Upper House, the Rajya Sabha. During the session, one of the Indian Member of Parliament, Dharmapuri Srinivas asked the Minister on the exact legal nature and standing of cryptocurrencies. The Minister replied that currently, there were no laws specific to cryptocurrencies.
On this reply, the Member of Parliament followed up on the actions the government was taking to stop the public and enterprises from its use,
“Whether the government has taken note about the prevalence of cryptocurrency in the country and if any action is being taken against the persons who are responsible for running the cryptocurrency in the market?”
The Finance Minister’s reply was a negative. Mr. Thakur went on to explain why no actions were being taken. According to the Minister, since there are no laws specific to the use, proliferation and dealings of cryptocurrency, the government cannot take any action against people who possess it. However, cryptocurrencies are subject to existing laws and violation of these can result in legal actions by the Reserve Bank of India, the income tax authorities and law enforcement agencies.
In recent weeks, a leaked draft has been making rounds in the local media, claimed to be a prelude to an official document, titled, “Banning of Cryptocurrency & Regulation of Official Digital Currencies”. According to the unverified draft, the bill has been designed specifically to counter the vacuum of cryptocurrency related laws. Furthermore, the draft clearly states that all forms of “non-official” cryptocurrencies would be banned in the country. The bill, for the first time, tried to define what a cryptocurrency is for the country,
“Any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value”
The definition, however concise, does cover cryptocurrencies in their true sense. Yet, the words “Official Digital Currency” give a hint that the government might consider launching its own cryptocurrency in the future. The bill does go on to propose that exactly.
The Indian government seems to have a slight case of love-hate relationship with cryptos. It has had a tough stance on cryptocurrencies, with one official stating that they want blockchain, but not cryptocurrencies.
India has also previously considered a national cryptocurrency, but abandoned the plan. If the leaked draft is considered to be true, then it seems that the Indian government is reconsidering a state backed cryptocurrency. That, or at least setting aside a provision in the law.
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