Chennai: People who are found to be dealing in cryptocurrencies in the country will be sentenced to imprisonment for a decade, said a draft bill and added that an official digital currency might be in the making, for the country.
Selling, buying and/or mining cryptocurrencies will be considered a non-bailable offence, said reports on the proposal in the draft of Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019.
The penalty is applicable to those who ‘mine, generate, hold, sell, transfer, dispose, issue or deal in cryptocurrencies directly or indirectly’, said media reports.
Several governmental initiatives within the world’s second-most populous nation have been undertaken to regulate blockchain, when Prime Minister Narendra Modi first established a panel to study how to regulate the crypto sector in November 2017.
A committee including representatives of the Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC), among others in support of a total ban and is “of the view that already there is a lot of delay in taking action against cryptocurrency”.
Economic Affairs Secretary Subhash Chandra Garg leads the panel that is drafting the bill. The panel reportedly has a number of members of the Securities and Exchange Board of India (SEBI).
The draft also advocates introduction of an official digital currency for India, the “Digital Rupee”, that would presumably not land users in jail.
Reports state that the move comes as a setback for various cryptocurrency trading platforms in the country that were awaiting a positive step in favour of cryptocurrencies from the government.
“If any conduct is punishable under any other law, this Act will be in addition to, and not in derogation of such law,” the draft is said.
While the draft proposed strict actions against people dealing in cryptocurrencies, it also advocates introduction of an official digital currency for India. The ‘Digital Rupee’ will be introduced after consulting the central board of the Reserve Bank of India (RBI).
| In denial |
| The Reserve Bank of India has denied any knowledge of a proposed ban on cryptocurrencies – despite reports that a number of governmental agencies have backed the draft legislation – according to a Right to Information request filed on 4 June.
Varun Sethi, a lawyer specialising in blockchain, filed the inquiry into the RBI-s involvement with ‘Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019’ draft. Bank officials said the RBI was not in communication with governmental agencies during the legislative process and had not received a copy of the bill. The bank forwarded several of Sethi’s questions to the Department for Economic Affairs as well as the Ministry of Finance – including, ‘What are -official digital currencies’ as per the RBI?’ The bank has been involved in cryptocurrency legislation as recently as April when the organisation unveiled a regulatory sandbox that would allow blockchain products – excluding digital currencies – to be tested on a sample of consumers. It has not endorsed a full ban on cryptocurrencies in the past. |
| Fb surprise |
| Meanwhile, Facebook’s much-hyped cryptocurrency project is expected to be launched later this month, stated reports.
Media houses state that the social media giant will have a bonus for merchants who adopt the currency. It will also have real-world kiosks where the cryptocurrency can be exchanged for real money, which makes it more appealing than the likes of Bitcoin which does not have such a feature Facebook had appointed former PayPal executive David Marcus about a year ago to begin exploring use-cases of blockchain, which makes the base of the new cryptocurrency, and reports say that the employees working on this project will have the option to get paid in the new currency. |