Standing Committee of Parliament wants government officials to appear before it to address existing concerns
In a meeting that was the first of its kind, the Parliamentary Standing Committee on Finance chaired by Bharatiya Janata Party (BJP) MP Jayanth Sinha reached consensus on Monday that cryptocurrencies in India cannot be stopped and should instead be regulated. The meeting brought together professionals from the Blockchain and Crypto Assets Council (BACC), representatives of major crypto exchanges, the Indian Institute of Management Ahmedabad, among others.
“There was a general consensus among MPs that there should be regulation instead of banning it. Now there are two ways to look at it. Either 90 percent are prohibited and 10 percent are permitted or vice versa. It is the compromise discussion that is pending. And for that, you have to go point by point “, a source said Express Financial.
Uncertainties over who should lead regulation
At the meeting, industry representatives told the parliamentary panel that enforcing a ban may not help much with security concerns and the need to protect investors from financial crime. They suggested putting regulations in place to cover the crypto industry, although no specific regulator has been appointed to be the watchdog for digital assets.
This meeting is expected to be followed by others in the future, given the crypto situation in India. Digital assets have been a subject of controversy because of some of their facets. One of the most remarkable facets is the astronomical returns that crypto services promise to users.
Just a few days ago, Prime Minister Narendra Modi led a high-level meeting where crypto and related issues were discussed. Among the main concerns raised at the meeting were excessive promises and lack of transparency regarding digital assets. A strong view has been expressed that “misleading” information around crypto, which often targets gullible youth through bogus ads and over-promises, should be dealt with.
Supreme Bank of India is cynical about cryptocurrencies
Ahead of Monday’s consensus, Reserve Bank of India (RBI) Governor Shaktikanta Das reiterated the government’s position on crypto last week. Das insisted that crypto poses a threat to the macroeconomic and financial stability of any financial system unless it is regulated.
The governor was also skeptical of the gigantic numbers that would have been presented as representing the market value of the assets. There has also been a lack of clarity on the crypto situation in India in the past. In March 2020, the Supreme Court overturned a crypto ban issued via an RBI circular two years earlier. The April 2018 circular prohibited banks and other regulated entities from providing services related to virtual currencies.