No clarity over Crypto Bill

The Reserve Bank of India, believing that crypto-technology and businesses are only in the currency business, has been constantly hammering the government to ban the crypto-currencies - Subhash Chandra Garg

New Delhi: With the government once again failing to table the (much-expected) Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, in the Winter Session of Parliament, former Finance Secretary Subhash Chandra Garg said on Thursday that he had no confidence in the ability of government to figure out the complexities of this new crypto phenomenon.

"I expressed serious doubts when the government had expressed its intent to present the bill, about the introduction of the crypto-assets/currencies bill in the Winter Session of Parliament. I am, therefore, not surprised to see the present situation where there is zero clarity over what is the Bill," Garg told IANS.

This was the second time that the Crypto Bill 2021 was listed on the Parliament's agenda but did not see the light of the day. It was also deferred during the Budget Session of Parliament in February this year.

Garg, a pioneer in formulating policies around crypto, headed the inter-ministerial committee (IMC) that drafted the cryptocurrency bill entitled "Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019". According to him, the government has been buffeted by two forces in this matter.

First, "the Reserve Bank of India (RBI), believing that crypto-technology and businesses are only in the currency business, has been constantly hammering the government to ban the crypto-currencies and statutorily empower RBI to issue digital bank-notes," said Garg. "The crypto-currency exchanges, applying the force from the other side, want the government to treat crypto-currencies as assets and statutorily create a regulatory mechanism for the same," he added.

The government seems to be caught up in this crypto storm unable to make up its mind, he noted. Adding to the government's problems are several critical issues spawned by this new crypto technology phenomenon.

More than addressing the issue of legitimising cryptocurrencies in India in the upcoming bill, the government is now facing deeper challenges like crypto being potentially misused for hawala and money laundering, investments worth billions of dollars escaping to abroad and capital gains tax being avoided by the trade exchanges as well as investors.

With an estimated 15 to 20 million crypto investors, and no clarity on the size of the Indian crypto market, a blanket ban is set to shake up the entire crypto ecosystem and affect millions who have put in their hard-earned money into various crypto trading exchanges.