Sunday, September 25, 2022

Crypto debate rages in Rajya Sabha: Time to reign crypto volatility?

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The government will soon introduce a bill on cryptocurrency after the Cabinet’s approval, said Finance Minister Nirmala Sitharaman on Tuesday. “This is a risky area and not in a complete regulatory framework. No decision was taken on banning its advertisements. Steps are taken to create awareness through RBI and SEBI. The government will soon introduce a Bill once the Cabinet clears it,” Sitharaman replied during Question Hour in Rajya Sabha when Bihar’s BJP MP Sushil Kumar Modi asked if the government is planning to ban “misleading advertisements” till a bill comes up.

The BJP leader said, “Last time also it was mentioned in the bulletin but the bill on cryptocurrency could not come into the house.” The ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ is among 26 new bills on the agenda of the government for the winter session of the Parliament.

The Bill seeks to “create a facilitative framework for the creation of the official digital currency to be issued by the RBI”. It also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.

Prime Minister Narendra Modi had earlier urged democracies around the world to ensure that crypto-currencies or bitcoin do not end up in the wrong hands and spoil the youth. Delivering a keynote address at The Sydney Dialogue, PM Modi said that it is essential for democracies to work together to create standards and norms for data governance. “It should also recognise national rights and, at the same time, promote trade, investment and the larger public good,” he said.

“Take crypto-currency or bitcoin for example. It is important that all democratic nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youth,” PM Modi added.

Prior to that, PM Modi had chaired a comprehensive meeting on the way forward for cryptocurrency and related issues. At the meet, discussions were held on the unregulated crypto currencies and how they cannot be allowed for money laundering and terror financing, government sources said.

The meeting was held after a consultative process done by the Reserve Bank of India, the Union Finance Ministry, and the Ministry of Home Affairs (MHA) in which global and Indian experts were consulted and global examples and best practices studied. According to sources, the government strongly feels that attempts to mislead the youth through over-promising and non-transparent advertising have to be stopped.

It was also discussed that unregulated crypto markets cannot be allowed to become avenues for money laundering and terror financing. Sources said that the government is cognizant of the fact that this is an evolving technology hence it will keep a close watch and take proactive steps. There was consensus also that the steps taken in this field by the Government will be progressive and forward-looking. The government will continue to pro-actively engage with the experts and other stakeholders.

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