Indian regulators are currently standing at the periphery of the Cryptocurrency ecosystem, trying to decide whether and how to enter the market, so that no negative effects are befallen on the economy and citizens. The committee led by Subhash Chandra Garg, secretary, department of economic affairs, is looking into the regulatory framework that is required for crypto assets and virtual currencies. In most likeliness a report of the same will submitted by December, it is asserted that the report will amend existing laws and holding cryptocurrencies, that is not approved by the government will be a punishable offence.
Last, year in December the aforementioned committee was set up to examine issues related to crypto assets and their subsequent regulations. Led by Garg, other members of the panel include Securities and Exchange Board of India chairman Ajay Tyagi and Reserve Bank of India (RBI) deputy governor BP Kanungo. In its last stages of deliberation the panel will soon disclose the government’s approach pertaining to virtual currency.
India’s aversion to Cryptocurrency
The key fear that the government and the central bank of India pose is that the unregulated assets could be used as to evade taxes or to strike deals outside the regulatory boundaries, including multi-level marketing (MLM) and Ponzi schemes. The government also awaits the special report on the subject by RBI, who formed a inter-departmental group in April to “provide guidance on the desirability and feasibility to introduce a central bank digital currency”.
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