Cryptocurrencies In India Will Be Regulated, Not Banned: Upto Rs 20 Crore Penalty For Breaking Rules
Instead of banning, the proposed cryptocurrency bill has suggested regulation of private cryptocurrency as per a Cabinet note circulated by the government.
Cryptocurrencies As An Asset
In simple words, the Indian government isn’t looking to ban cryptocurrencies in the country, but it is looking to regulate them as ‘assets’.
The note clearly specifies that Crypto is not recognised as legal currency in India yet.
Further, suggesting that Cryptocurrency is not recognised as legal currency in the country.
The move conforms to what Finance Minister Nirmala Sitharaman said earlier this week about Bitcoin not being recognised as a currency for payments in India.
SEBI Regulating Cryptocurrency
It seems that India is working on its own central bank digital currency (CBDC) that will be governed and monitored by the Reserve Bank of India (RBI).
The Cabinet note also suggests that the legislation describes Cryptocurrency as Cryptoasset.
So, these Crypto Assets will be dealt with the existing crypto exchange platforms.
These platforms will further be regulated by the Securities and Exchange Board of India (SEBI).
Moving ahead, a cut-off date will be prescribed for those having crypto assets to declare and bring under the crypto exchange platforms.
These platforms will be regulated by the market regulator.
Penalties With A Criminal Imprisonment
According to the Reserve Bank of India’s proposal, virtual currency has not been clubbed with the new crypto legislation.
Although, the central bank will regulate issues related to cryptocurrency.
Those found violating the exchange provisions will be penalised with a criminal imprisonment of up to one and a half years.
The penalties are in the range of Rs 5 crore to Rs 20 crore.
It may also be levied by the regulator.
Those found using the assets for terror related activities, the provisions of the Prevention of Money Laundering Act (PMLA) will be applied with suitable amendments as a deterrent.
Volatile Nature Of Digital Tokens
In November, Prime Minister Narendra Modi highlighted the volatile nature of digital tokens, calling on global cooperation from democratic nations to regulate the sector and protect the youth.
The founder of CoinDCX and the co-chair of the Blockchain and Crypto Assets Council (BACC), Ashish Singhal said, “The industry has been actively communicating with all stakeholders keeping investor protection at the forefront,”.