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BUSINESS EYE NOVEMBER 26, 2021 | The Indian Eye 42

amid terror, money-laundering issues, indian

tightens screws on cryptocurrencies

Modi says all democratic nations must work together to ensure cryptocurrency
“does not end up in wrong hands, which can spoil our youth”

OuR BuREAu

New Delhi
ndia plans to tighten regulation of
cryptocurrencies to deter inves-
Itors from holding them though
the government is unlikely to follow
through with an earlier plan to ban
private digital coins, according to two
sources familiar with the discussions.
Instead, it could allow only those that
have been pre-approved by the gov-
ernment to be listed and traded on
exchanges -- an intentionally cumber-
some process, said the sources, who
asked not to be named as the discus-
sions are private.
“Only when a coin has been ap-
proved by the government can it be
traded, else holding or trading it in
may attract a penalty,” said a source.
The government aims to intro-
duce and pass a cryptocurrency law in
the parliamentary session that begins
this month. Such a pre-verification
approach would create obstacles for
thousands of peer-to-peer currencies
that thrive on being outside the ambit There are 15-20 million crypto investors in India, with total crypto holdings of around 400 billion rupees ($5.39 billion)
of regulatory scrutiny.
On Thursday, Prime Minister terror financing, government sources the experts and other stakeholders. marketing and advertising of crypto-
Narendra Modi said all democratic said. Earlier this year, the government currencies, to dull their allure for re-
nations must work together to en- The meeting was held after a con- considered criminalizing the posses- tail investors, said an industry source
sure cryptocurrency “does not end up sultative process done by the Reserve sion, issuance, mining, trading and who was part of a separate parliamen-
in wrong hands, which can spoil our Bank of India, the Union Finance transference of crypto-assets. tary panel discussion held on Monday.
youth” -- his first public comments Ministry, and the Ministry of Home Its stance has changed since then The government is looking to
on the subject. Delivering a keynote Affairs (MHA) in which global and -- but only slightly, according to the classify crypto as an asset class, as
address at The Sydney Dialogue, PM Indian experts were consulted and two sources, who said hefty capital demanded by the crypto exchanges,
Modi said that it is essential for de- global examples and best practices gains and other taxes may be levied rather than as a currency, two sources
mocracies to work together to create studied. to discourage cryptocurrency trading. said. But the senior government of-
standards and norms for data gov- According to sources, the govern- A senior government source said ficial told Reuters that the plan is to
ernance. “It should also recognize ment strongly feels that attempts to investors “will have to pay over 40% ban private crypto-assets ultimately
national rights and, at the same time, mislead the youth through over-prom- on any crypto gains so far”, adding while paving the way for a new Cen-
promote trade, investment and the ising and non-transparent advertising that additional goods and services tral Bank Digital Currency (CBDC).
larger public good,” he said. have to be stopped. sales taxes, and securities transaction The Reserve Bank of India,
“Take crypto-currency or bitcoin It was also discussed that un- taxes, could be levied on top of any which has voiced “serious concerns”
for example. It is important that all regulated crypto markets cannot be capital gains taxes. about private crypto, is set to launch
democratic nations work together on allowed to become avenues for mon- The finance ministry did not re- its CBDC by December.
this and ensure it does not end up in ey laundering and terror financing. spond to an email seeking comment. Bitcoin, the world’s biggest
the wrong hands, which can spoil our Sources said that the government is Last week, Modi chaired a meet- cryptocurrency, is hovering around
youth,” PM Modi added. cognizant of the fact that this is an ing to discuss the future of cryptocur- $60,000 and has more than doubled
Last week, PM Modi had chaired evolving technology hence it will keep rencies, amid concerns that unregu- since the start of this year, attracting
a comprehensive meeting on the way a close watch and take proactive steps. lated crypto markets could become hordes of local investors.
forward for cryptocurrency and re- There was consensus also that the avenues for money laundering and No official data is available but
lated issues. At the meet, discussions steps taken in this field by the Gov- terror financing, sources separately industry estimates suggest there are
were held on the unregulated crypto ernment will be progressive and for- said on Saturday. 15-20 million crypto investors in India,
currencies and how they cannot be ward-looking. The government will According to sources, the new with total crypto holdings of around
allowed for money laundering and continue to pro-actively engage with rules are also likely to discourage 400 billion rupees ($5.39 billion).

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