An Official Cryptocurrency For India? Report Suggests ‘Keeping An Open Mind’, Penalties For Other Crypto Activities 

An Inter-Ministerial Committee (IMC) setup by the government to make recommendations with regards to the policy on cryptocurrencies has submitted its report to the government.

While recognising the positive aspect of distributed ledger technology (DLT), the report has both good as well as bad news for cryptocurrency enthusiasts.

As a positive, the report says that DLT has several applications across sectors like loan-issuance tracking, collateral management, fraud detection and claims management in insurance, and reconciliation systems in the securities market. It also suggests that the government should keep an ‘open mind’ regarding an official digital currency.

However, the report takes a dim view of privately developed and cryptocurrencies and has recommended banning of the cryptocurrencies in India and imposing fines and penalties for carrying on of any activities connected with cryptocurrencies in India.

The report however, also recognises the area as a evolving one, and recommends that the government should revisit the issues as and when required.

Cryptocurrencies are a sensitive issue in India, with government treading with caution on the issue. While the government has specifically stated that they are not legal tender in India, other policies regarding regulation remain a grey area. A draft bill, the ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’ had earlier been received by the government.

This report and the draft bill will now be examined in consultation with all the concerned departments and regulatory authorities, before the government takes a final decision.