The Interministerial Committee has recommended to ban cryptocurrencies in India and to impose severe fines and penalties to thwart any digital currency-related activity in the country.
Established in November 2017 to study various issues relating to digital currencies and to be able to propose targeted and specific actions to be taken on the matter, the committee therefore expressed itself quite clearly on this growing business. The government, for its part, said the report and the bill would now be examined in consultation with all relevant departments and regulators, before taking a final decision.
In the report, the interministerial group highlighted the positive aspects of the technology behind cryptocurrencies, and suggested various applications, especially in financial services, for the use of DLT and blockchain in India, systems that can be used by banks and other companies to streamline processes such as loan origination monitoring, collateral management, fraud detection and claims management in the insurance sector, as well as reconciliation systems in the securities market.
But as far as the private cryptocurrencies, given the risks associated with them and the volatility of their prices, the group recommended banning the digital currencies in India and to impose fines and penalties for carrying out any activity that may be related to them.
However, the ban on digital currencies should not lead the government to close its mentality towards a possible one official digital currency – continues the dossier. Given that digital currencies and the underlying technology are still evolving, the group proposed that the government could set up a standing committee to review the issues addressed in the report as and when necessary.