The 19th meeting of the Financial Stability and Development Council (FSDC) was held under the Finance Minister Arun Jaitley on Tuesday. The finance minister reviewed the current global and domestic economic situation and financial sector performance and the council decided that regulators and government would keep a close watch on the developments. according to a press release issued by Press Information Bureau.
The meeting was attended by the Who’s Who of the financial scene in India such as Urjit R. Patel, Governor, Reserve Bank of India (RBI); Hasmukh Adhia, Finance Secretary and Secretary, Department of Revenue; Subhash Chandra Garg, Secretary, Department of Economic Affairs; Rajiv Kumar, Secretary, Department of Financial Services; Injeti Srinivas, Secretary, Ministry of Corporate Affairs; Ajay Prakash Sawhney Secretary, Ministry of Electronics and Information Technology; Ajay Tyagi, Chairman, Securities and Exchange Board of India (SEBI), among others.
Interestingly, the meeting also discussed cryptocurrencies. For people waiting for the developments, the scene does not appear promising. Apparently, the Council debated on the challenges surrounding cryptocurrencies. Chaired by Garg who is the Secretary of Department of Economic Affairs, it appears there is a proposal to ban use of cryptocurrencies and encourage use of distributed ledger technology as was mentioned in the Union Budget Speech of 2018-19. The exact wording goes, “The Council also deliberated on the issues and challenges of Crypto Assets/Currency and was briefed about the deliberations in the High-level Committee chaired by the Secretary (Economic Affairs) to devise an appropriate legal framework to ban use of private crypto currenciesin India and encouraging the use of Distributed Ledger Technology, as announced in the Budget 2018-19.”
As disheartening as this press release reads, one thing is not clear in this. What exactly are private coins? Does the Council mean that they may restrict trading of privacy-oriented coins such as Monero or ZCash?
Crypto-News India reached out to some players in the industry to find out more. Nischal Shetty, founder of WazirX put forward a few theories. He said, “it’s very hard to say because I’ve never heard the term “private crypto” anywhere else before. They could be talking about: Non governement backed crytpo – which is every crypto today, Privacy coins may be which make it hard to trace? Which means a few coins may not be allowed and other will be, Crypto that are under the control of companies and not decentralized in which case BTC, ETH and many others that are open source and not owned by any private org would be allowed.”
He added, “The article also says “encouraging the use of Distributed Ledger Technology”. Now DLT without crypto is useless like we all know. So if they are to promote DLT then it has to be Public DLT which involves crypto. I’m sure the people in the committee are smart enough to understand that DLT without crypto is not possible in public domain since that would make it a very inefficient database and it’s only meant for private companies to use for their own personal growth. Public cannot participate in such cases which means millions of young and old Indians who believe in crypto will be cheated off the opportunity to invest in this asset class. My belief is that they mean to say Public DLT will be encouraged and if that’s the case then crypto assets will be involved and used.”
Eminent Blockchain lawyer, Varun Sethi told Crypto-News India, “The publication by pib states ‘ban use of private crypto currencies in India’. This may be construed as ban of only India issued ico crypto currency in india. Since any crypto to crypto transaction by Indians or others can not be actually banned since they are purely private transactions. The words seem vague and would require further explanation by the Govt. There can be numerous theories but time will eventually reveal a solution. However, the more pressing need of the hour is to spread awareness, among people as well as government officials.”
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