A Parliamentary Standing Committee on Finance, led by BJP MP and former union minister Jayant Sinha, held a meeting today with industry associations and experts on cryptocurrency. During the meeting, there was a consensus that the digital currency can’t be stopped but it must be regulated, news agency ANI reported citing unnamed sources.
Further, the members of the Parliamentary panel are said to have wished for govt officials to appear before it and address their concerns.
The panel meeting comes just days after Prime Minister Narendra Modi chaired a high-level review meet on the way forward for cryptocurrency.
This is the first meeting on the subject to be convened by the Parliamentary panel on the subject, which has generated a lot of interest as well as concerns in various quarters around investment potential and risks.
There was a consensus that a regulatory mechanism should be put in place to regulate cryptocurrency. Industry associations and stakeholders were not clear as to who should be the regulator, sources told ANI.
During the meeting, the Members of Parliament (MPs) have expressed concerns over security of investors’ money
An MP raised eyebrows over full-page crypto advertisements in national dailies. Experts said that cryptocurrencies are some sort of investors’ democracy, the people said.
PM Modi on Saturday led a review meeting on the digital currency, and it was decided that the government will continue to proactively engage with experts and other stakeholders on the evolving technology.
The PM’s meeting also concluded that attempts to mislead the country’s younger generation through over-promising and non-transparent advertisements should be stopped. It was also discussed that unregulated crypto markets cannot be allowed to become avenues for money laundering and terror financing, they said.
India has had a hot-and-cold relationship with digital currencies in the past few years. In 2018, it effectively banned crypto transactions after a string of frauds following Modi’s sudden decision to eliminate 80% of the nation’s currencies, but the Supreme Court struck down the restriction in March 2020.
After Supreme Court overturned the RBI’s order, which effectively lifted the ban on cryptocurrency trading in India, the craze in India has grown at a furious rate.
Following this in February 5, 2021, the central bank had instituted an internal panel to suggest a model of central bank’s digital currency.
The Reserve Bank of India (RBI) has repeatedly reiterated its strong views against cryptocurrencies saying they pose serious threats to the macroeconomic and financial stability of the country and also doubted the number of investors trading on them as well their claimed market value.
Recently, the RBI governor Shaktikanta Das sounded alarm on cryptocurrencies, cautioning investors on the potential pitfalls of the digital currency.
Cryptocurrencies are a very serious concern from a macro economic and financial stability point of view, Das had said last week.
The RBI had also announced its intent to come out with an official digital currency.
The union government has not yet enacted a law on cryptocurrencies is in consultation with industry experts, comments from various officials and ministers
After several rounds of caution, the government might largely want to set severe limits on the trading of cryptocurrencies in India in the larger public interest.
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