Subhash Chandra Garg, Secretary of Department of Economic Affairs, as well as the chief of the recently formed panel to examine cryptocurrencies and the underlying technology recently told news channel ET Now, that the team is close to announcing regulatory guidelines for trading cryptocurrencies.
The topic of cryptocurrencies has been a divisive factor with many in the tax department calling for an outright ban and others in the government, who are seemingly open to the prospect of crypto trading in India.
Garg said, “we are fairly close to developing a template (for the use of cryptocurrencies) that might be in the best interests of our country. We have moved pretty far in this regard, and we have prepared a draft that entails what parts of this businesses should be banned and what should be preserved. This should be discussed by the first week of July and we should wrap this up within in the first fortnight of July.”
During the annual budget session which took place in February 2018, the Finance Minister Arun Jaitley had declared that cryptocurrencies are not legal tender and all financial illegal activities will be cut down.
Jaitley had said, “Distributed Ledger System on the Blockchain technology allows organisation of any change of records or transactions without the need of any intermediaries. 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 a Part of the Payment System. The Government will explore use of Blockchain technology proactively for assuring in Digital Economy.”
It is important to note that the government does not favour using the word cryptocurrencies; instead it uses crypto assets. On that occasion, Garg had said, “We hope that within this year, the committee would finalize its recommendations and then it would require legal changes, regulatory assignments, but certainly there will be regulations by the end of this financial year.”
Another interesting fact that emerged was recently the RBI governor deposed before a parliamentary panel and said that under Section 51 of the Banking Regulation Act, the central bank does not have the power to monitor the bank. However, the government says that the RBI is the regulator.
Although its too early to say, the last paragraph may definitely come as a silver lining to the exchanges that are waiting to hear the July 20 judgement.
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