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Regulate, Don’t Ban Cryptocurrencies: Members Of Parliamentary Panel Back Crypto Regulation

NEW DELHI: A parliamentary panel on Monday backed regulation over an outright ban, just days after Prime Minister Narendra Modi presided over a meeting on the future of cryptocurrency. The draught measure on cryptocurrency regulation is anticipated to be debated during Parliament’s winter session, which begins on November 29.

The Parliamentary Standing Committee on Finance has organised the first meeting on the subject.

On Monday, the Parliamentary Standing Committee meeting was hosted by BJP leader and former minister of state for finance Jayant Sinha, who reviewed the advantages and cons of crypto money with numerous stakeholders.

According to insiders, several members believe that cryptocurrency exchanges should be controlled rather than outright banned.

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The committee also met with associations and industry professionals to address crypto money challenges.

According to sources familiar with the committee’s talks, the meeting was a positive first step toward understanding cryptocurrencies, and the majority of the members were in favour of imposing restrictions rather than a prohibition.

The discussion took place against the backdrop of mounting worries in many sectors regarding cryptocurrencies and the potential hazards associated with trading in them, especially given the global interest in such assets. Currently, there are no explicit restrictions in place, nor is there an outright ban on the usage of cryptocurrency in the country.

At an event last week, RBI Governor Shaktikanta Das stated that the central bank was wary about bitcoin. “As a central banker, we have major concerns about it, and we have raised them numerous times,” Das added.

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The conclusion at the PM-led meeting a few days ago was that the government must take a forward-thinking and progressive stance on the issue while enforcing strict rules.

After the meeting, Sinha told a television station, “Today’s taxation framework is well-suited to dealing with crypto tokens and crypto finance. We must select where to categorise the various roles that crypto finance can perform. It can act as an asset, security, commodity, or payment mechanism. The underlying technology manifests itself in a variety of ways.”

Taxation would become easier once the wide bucket into which this fall was determined, he added.

Representatives from crypto exchanges, blockchains, and the Crypto Assets Council (BACC), as well as academics and other stakeholders, spoke before the panel.

Some members of Congress on the panel told PTI that prohibiting cryptocurrency would be difficult. The panel agreed that a Chinese wall should be erected to prevent cryptocurrencies from being fungible in the real world, and that their interface with the real world should be regulated.

According to reports, concerns were voiced about the marketing done by certain crypto exchanges, but the members mostly agreed that establishing a body to supervise rules was the best way ahead.

According to them, the goal of the conversation was to better understand the infrastructure, commercial, and economic impact of cryptocurrencies.

On March 4, 2020, the Supreme Court overturned an RBI circular issued on April 6, 2018, barring banks and businesses regulated by it from providing virtual currency services.

In July 2019, a draught legislation, the Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019, was also made public. The central bank established an internal panel on February 5, 2021, to offer a concept for the central bank’s digital currency.

The RBI revealed its intention to create an official digital currency in response to the rise of crypto currencies, which the central bank is concerned about.

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