The Union’s Finance Ministry in Lok Sabha announced on Monday that the Narendra Modi government has yet to approve the report by former Finance Minister Subhash Chandra Garg, led by the Inter-Ministerial Committee (IMC), on the ban on cryptocurrencies and the approval of the Reserve Bank of India (RBI) digital currency.
In addition, the government will respond to a request, to propose a new law to parliament. In a written response, the Finance Ministry stated: “The government will decide on the IMC’s recommendations and the legislative proposal, if any, will be submitted to parliament through due process”.
The ministry said: “The high-level body recommended in its report, that all private cryptocurrencies, except the state issued cryptocurrencies, be banned in India. The government cited from the 2018-2019 budget, “it was announced in the budget speech for 2018-19 that the government does not consider cryptocurrencies as legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or to prevent it as a part of the payment system. The government will proactively explore the use of blockchain technology to usher in the digital economy.
Meanwhile, the RBI is awaiting a legal clarity from the government as it has expressed its desire to launch its digital currency, which needs government legal support.
On November 2, 2017, the government had an inter-ministerial committee (IMC) chaired by the Minister for Economic Affairs along with the the Secretary of the Ministry of Electronics and Information Technology, the President of Sebi and a Deputy Governor of the RBI as members, to deal with the problems related to virtual currencies to investigate and propose specific measures. “With regard to private cryptocurrencies, the risks involved and the volatility of their prices, the group recommended banning cryptocurrencies in India and imposing fines and penalties for conducting cryptocurrency-related activities in India”, said a release in this regard.
The report said that in addition to Bitcoin, several other cryptocurrencies have emerged, including Ethereum, Ripple, and Cardano. There are currently around 2,116 cryptocurrencies, with a market capitalization of $ 119.46 billion, it added.
