The Indian government has struck a cautionary note on cryptocurrencies and decided to continue to engage with experts and other stakeholders in the sector. A bill on cryptocurrency is expected to be tabled in Parliament during the Budget session.
A meeting chaired by Prime Minister Narendra Modi on Saturday discussed regulations for cryptocurrencies with Reserve Bank of India officials and bureaucrats from the Home and Finance ministries. The government plans to engage in global partnerships to chalk out global strategies to meet the challenge of private, unregulated cryptocurrencies.
The meeting also expressed concern over “attempts to mislead the youth through over-promising & non-transparent advertising,” and called for measures to curb it. It was decided that unregulated crypto markets cannot be allowed to become avenues for money laundering and terror financing.
Reserve Bank of India (RBI) Governor Shaktikanta Das and Securities and Exchange Board of India (Sebi) chairperson Ajay Tyagi were at the meeting in New Delhi. The meeting came ahead of a parliamentary committee hearing on Monday with industry experts on the challenges and opportunities that cryptocurrencies throw up.
Central bank governor Shaktikanta Das earlier expressed serious concerns. At a recent function, he said: “Cryptocurrencies are a serious concern to RBI from a macroeconomic and financial stability standpoint. The government is actively looking at the issue and will decide on it. But as the central banker, we have serious concerns about it and we have flagged it many times.”
Das also questioned the big figures being reported in the media on the number of investors trading in cryptocurrencies as well the market value of these currencies.
“I am not sure about the veracity of these numbers. Of course, my view may not be fully right as we don’t get full information about these currencies as they aren’t regulated by us or by any other central bank,” he said.
“But I still think the total number of investors look clearly exaggerated as the bulk of them, say over 70%, have invested only about 1,000 rupees each in cryptocurrencies.”