News Brief

Parliamentary Panel Holds Meeting To Say 'Yay' Or 'Nay' To Cryptocurrencies: Find Details Here

Bhaswati Guha Majumder

Nov 16, 2021, 02:14 PM | Updated 02:14 PM IST

Parliament (Swarajya Magazine)
Parliament (Swarajya Magazine)
  • The most severe worry highlighted at the meeting was the security of investors' funds.
  • A member of Parliament who attended the discussion raised concerns over full-page cryptocurrency ads in major newspapers.
  • The conclusion of the first-ever parliamentary panel of MPs reviewing the broad contours of Crypto Finance was that cryptocurrency cannot be halted, but it must be regulated.

    The Standing Committee on Finance, chaired by Lok Sabha member Jayant Sinha, met with officials from crypto exchanges, the Blockchain and Crypto Assets Council (BACC), industry organisations, and other stakeholders to explore concerns about cryptocurrency regulation and promotion in India.

    Various sections have expressed worries about the investment opportunities and risks associated with Cryptocurrency in the country. However, the panel agreed that a regulatory mechanism should be established, albeit it was unclear who should serve as the regulator.

    The most severe worry highlighted at the meeting was the security of investors' funds. A member of Parliament who attended the discussion raised concerns over full-page Cryptocurrency ads in major newspapers.

    Cryptocurrencies, according to experts, are a form of investor democracy.

    Sinha stated that the parliamentary panel had hosted several representatives of cryptocurrency exchanges in India, but that the panel had not reached any specific conclusions on the subject.

    The meeting between the crypto business and the panel took place just days before the Parliament's winter session, when the government is expected to introduce a cryptocurrency bill.

    “Regulatory framework will have to balance the opportunities and risks attached to cryptocurrencies,” Sinha said.

    According to him, experts from the cryptocurrency business verified that India has 1.5 crore registered cryptocurrency users with a total asset value of $6 billion. The data contrasts with a previous estimate claiming that India has over 100 million (10 crore) bitcoin users, which was advertised by cryptocurrency exchanges.

    The official agenda of the meeting sent to member MPs was "Hearing of views of Associations/Industry experts on the subject — Crypto-Finance: Opportunities and Challenges".

    While one of the MPs pointed out that El Salvador is the only government that recognises cryptocurrency as legal tender, the group of MPs want officials from the government to testify before the committee and explain their concerns.

    Several discussions with stakeholders have already been held by the Finance Ministry to explore the topic of regulation. The Reserve Bank of India and the Securities and Exchange Board of India (SEBI) have both expressed worry about the unregulated expansion of Cryptocurrencies in India, with a focus on vulnerable retail investors.

    Last week, RBI Governor Shaktikanta Das said: "On crypto...we have serious concerns from the point of view of macroeconomic and financial stability. How the issue has to be dealt with — we have given our detailed suggestions to the government; as far as I know, the matter is under the active consideration of the government, and the government will decide."

    An individual said that one of the primary points raised at the recent meeting by the central bank was that virtual currencies were intangible, making regulation and taxation difficult. Regulation would be tough as well if virtual currencies or exchanges originated outside the country, according to the source, reported Economic Times.

    The meeting took place amid increased concerns about the growing popularity of cryptocurrencies and the lack of any policy or regulatory mechanism to intervene in the event of an emergency.

    Many Indians are now receiving remittances in cryptocurrency, which is causing concern among security officials and the Reserve Bank, according to reports.

    India is one of the countries that is yet to decide on whether to regulate or outrightly prohibit virtual currencies. Meanwhile, Japan has allowed them and China has prohibited these virtual currencies.

    Get Swarajya in your inbox.