An Inter-Ministerial Committee(IMC) of the Indian Government in its recent report has arrived at a decision to suggest a ban on cryptocurrencies in the country. As feared by many Cryptocurrency start-ups and its enthusiasts the IMC has recommended the government of India to take a step towards banning all virtual currencies in the country. The committee has submitted a detailed report on the use of virtual currencies and its consequences along with a draft bill to the government of India. The committee suggests the issue and control of cryptocurrency by government alone and to ban the rest issued by private companies. A copy of the report and the draft bill has been listed on the official website of the Economics Affairs Department. The committee has recommended the fine up to Rs 25 crores and imprisonment for up to 10 years for anyone who violates the rules by issuing a cryptocurrency. Anyone found selling, mining, generating and transferring cryptocurrencies were also punishable. It claimed that no country across the world has ever considered virtual currencies as legal tender. However, its government’s decision to act upon the report.
Cryptocurrency is a digital asset created as a medium of exchange. It is designed to have secured financial transactions and transfer of assets. The decentralized control of cryptocurrency is made possible through blockchain which serves as a public financial transaction database. Bitcoin was the first decentralized cryptocurrency to be released in open-source software in the year 2009.
The committee seems to separate cryptocurrencies from digital rupee and other digital currencies. It recommended and proposed the concept of the government issuing its own digital currency and mentioned the threat of private parties when involved in such financial aspects of the economy may cause volatility in their prices and other risks. The report also mentioned the positive aspects and potential applications of Distributed-Ledger Technology which is also called as Block-chain especially in financial applications like collateral management, Fraud detection, and loan issuance tracking. If the recommendations were accepted by the government as proposed by the committee. It would give a big blow to the aspirations of cryptocurrency start-ups. CEO’s of many cryptocurrency companies like WazirX, Unicoin expressed their disappointment on IMC’s report but said they were hopeful on the government’s decision. The government is yet to take its final decision by examining the report submitted by IMC.