Key Takeaways
- Prime Minister Modi chaired a meeting on the way forward for cryptocurrency.
- The meeting concluded that attempts to deceive the youth through over-promising and non-transparent advertising should be prevented.
- The Centre is expected to enlist the help of specialists to establish legislation that guarantees unregulated marketplaces like cryptocurrency not to become channels for money laundering and terror financing.
- As the Finance Ministry prepares to introduce a comprehensive measure to govern cryptocurrencies, investors, and exchanges in Parliament’s winter session, this meeting took place.
Prime Minister Narendra Modi chaired a meeting on the issue of misleading non-transparent cryptocurrency advertising on Saturday. The meeting was chaired with government officials claiming that such uncontrolled marketplaces must not be allowed to become channels for “money laundering and terror financing.”
According to the sources, the meeting concluded that attempts to deceive the youth through over-promising and non-transparent advertising should be prevented. It implies that strict regulatory action is on the way.
A source said that since the government recognizes that this is a developing technology, it will keep a close eye and take proactive measures. There was also agreement that the government’s actions in this area would be progressive and forward-looking.
Sources even said that the government would continue to engage aggressively with experts and other stakeholders. It is so because the issue crosses geographical borders. So, global alliances and collaborative measures are expected. The meeting on the future of cryptocurrency and associated concerns was quite in-depth.
The meeting took place as the Finance Ministry prepared to introduce a comprehensive measure to govern cryptocurrencies, investors, and exchanges in Parliament’s winter session. While private cryptocurrencies are unlikely to be accepted as legal money, they may be taken as assets that may be invested in. The Parliamentary Standing Committee on Finance, chaired by Lok Sabha MP Jayant Sinha, will meet with stakeholders in the digital currency ecosystem on November 15 to hear their perspectives.
The final draught law that will be introduced in Parliament will be influenced by the points stated in the PM’s meeting and those sought in the parliamentary panel meeting on November 15. Sources said the Reserve Bank of India, Finance Ministry, and Home Ministry had conducted an extensive study on digital currencies and interviewed experts from across the country and the world ahead of today’s meeting.
The Reserve Bank of India has often stated its opposition to cryptocurrencies, claiming that they pose a severe threat to the country’s macroeconomic and financial stability. It has also questioned the number of investors trading on them and their alleged market value.
RBI Governor Shaktikanta Das on Wednesday had reiterated his views. The views were against allowing cryptocurrencies. He said that cryptocurrencies are a severe threat to any financial system since they are unregulated by central banks. His perspective comes ahead of the RBI’s internal panel report on the contentious issue due next month.
The RBI circular banning cryptocurrency was declared null and void by the Supreme Court in early March 2020. Following this, on February 5, 2021, the central bank established an internal panel to develop a digital currency model. In addition, the RBI declared its intention to create an official digital currency in response to the proliferation of cryptocurrencies such as Bitcoin, which the central bank has expressed concern about.
