Crypto can't be banned but must be regulated, Panel Of MPs And Industry Agree
The meeting of the panel is significant since it comes only days after PM Modi conducted a high-level discussion with officials on the subject.
The consensus of the first-ever Parliamentary panel reviewing the broad contours of Crypto Finance was that cryptocurrency cannot be banned, but it must be regulated. The Standing Committee on Finance, chaired by BJP's Jayant Sinha, met with officials from crypto exchanges, the Blockchain and Crypto Assets Council (BACC), industry organisations, and other stakeholders today to explore concerns about cryptocurrency regulation and promotion in India. Various sections have expressed worries about the investment opportunities and risks associated with Cryptocurrency in the country.
The meeting agreed that a regulatory mechanism should be established, although it was unclear who should serve as the regulator.
The most severe worry highlighted at the meeting was the security of investors' funds. A member of Parliament who attended the discussion raised concern over full-page Cryptocurrency ads in major newspapers. Cryptocurrencies, according to experts, are a form of investor democracy.
The panel's meeting is significant since it comes just days after Prime Minister Narendra Modi convened a high-level conference on cryptocurrency with officials from various ministries including the Reserve Bank of India.
"We have called stakeholders from across the industry including operators of major exchanges, members of CII as well as academics from the Indian Institute of Management (IIM) Ahmedabad, who have done a very thorough study on the crypto finance," Mr Sinha had told news agency PTI ahead of the meeting.
MPs now want officials from the government to testify before the committee and explain their concerns. The meeting's formal agenda, which was issued to member MPs, was, "Hearing of views of Associations/Industry experts on the subject - Crypto-Finance: Opportunities and Challenges".
El Salvador is the only government that recognises cryptocurrency as legal tender, according to another MP.
Several discussions with stakeholders have already been held by the Finance Ministry to explore the topic of regulation. The Reserve Bank of India and the Securities and Exchange Board of India have both expressed worry about the unregulated expansion of Cryptocurrencies in India, with a focus on vulnerable retail investors.
"On crypto...we have serious concerns from the point of view of macroeconomic and financial stability. How the issue has to be dealt with - we have given our detailed suggestions to the government; as far as I know, the matter is under the active consideration of the government, and the government will decide," RBI Governor Shaktikanta Das had said on Wednesday at a Business Standard event.
The RBI circular banning Cryptocurrencies was declared null and void by the Supreme Court in early March 2020.
An MP who spoke at today's Crypto-Finance meeting said the government intends to introduce a new bill to regulate cryptocurrencies.
The new bill could be introduced during Parliament's winter session, which begins on November 29, 2021.