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As markets and experts speculate on the consequences of India’s move to bring a bill to regulate cryptocurrency, sources in the security establishment told CNN-News18 that the regulation will not be an outright ban.
The Centre’s move to bring a bill in the upcoming Winter Session of Indian Parliament to regulate cryptocurrency has sparked a ripple effect, with bitcoin prices crashing to the lowest in a month.
As markets and experts speculate on the consequences of the decision, sources in the security establishment told CNN-News18 that the regulation will not be an outright ban.
“A regulation mechanism will be in place so that crypto is not misused. The government is concerned about the underground transactions happening against cryptocurrency — particularly its role in money laundering and terror financing and terror funding,” they said.
They added that cryptocurrency will not be recognized as legal tender as this is dangerous for the currency and taxation system of the country. “A strict mechanism will be in place so that law enforcement agencies can trace the origin of cryptocurrency used for illegal or anti-national work,” they said.
Sources in the government too said the move was aimed at eliminating the risks of crypto markets becoming avenues for money laundering and terror financing. “In the prime minister’s meeting on the issue earlier this month, there was a consensus that the steps taken in this field by the government will be ‘progressive and forward-looking. It was then also discussed that “unregulated” crypto markets cannot be let to become avenues for money laundering and terror financing.”
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is among 26 bills listed for introduction in the Winter Session, beginning on 29 November, according to the Lok Sabha website.
This comes a week after a Parliamentary panel, chaired by BJP leader Jayant Sinha, discussed the pros and cons of crypto finance with various stakeholders, and an agreement was reached that digital currencies can’t be stopped but must be regulated.
India has been taking a keen note on cryptocurrencies, thanks to its robust growth in the country amid a lack of regulations, but the government has been eager to bring in laws to regulate the digital currency sector.
Prime Minister Narendra Modi had last week said cryptocurrencies must not fall into the “wrong hands and spoil our youth“, urging all democratic nations to come together and ensure things like these do not happen. The government and the RBI had recently hinted about floating a strong regulatory control on cryptocurrency to avoid money laundering and terror financing, rather than banning it entirely.