The Narendra Modi administration is still reviewing the Inter-Ministerial Committee (IMC) recommendation on banning cryptocurrencies and allowing the Reserve Bank of India’s digital currency, according to the union finance ministry in the Lok Sabha on Monday (RBI).
In addition, the government will decide if new legislation would need to be introduced in House.
“The government would take a decision on the recommendations of the IMC and the legislative proposal, if any, would be introduced in the Parliament following the due process.” the finance ministry indicated in a written response.
“The high-level panel recommended in its report that all private cryptocurrencies, except any cryptocurrency issued by the state, be prohibited in India.” the ministry stated.
The administration cited the 2018-2019 Budget, saying, “It was announced in the Budget Speech for 2018-19 that the government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system. The government will explore the use of blockchain technology proactively for ushering in the digital economy.”
However, RBI is waiting for legal clarification from the government, since it has shown interest in launching its digital currency, which will require court approval.
On November 2, 2017, the government formed an inter-ministerial committee (IMC) under the chairperson of the economic affairs secretary, with the secretary of the Ministry of Electronics and Information Technology, the chairman of the Securities and Exchange Board of India, and an RBI deputy governor as members, to study the issues surrounding virtual currencies and make recommendations.
“As for private cryptocurrencies, given the risks associated with them and volatility in their prices, the group has recommended the banning of the cryptocurrencies in India and imposing fines and penalties for carrying on of any activities connected with cryptocurrencies in India,” according to a press release.