The inter-ministerial committee set up by former Indian finance minister Arun Jaitley recommends a ban on bitcoin.
According to a report published today, the Subhash Garg committee believes that cryptocurrencies cannot serve the purpose of currency. Calling them “private cryptocurrencies” over their non-sovereign nature, the committee wrote that they are inconsistent with the essential functions of money/currency, adding that they support the stance taken by the Reserve Bank of India to impose a banking ban on them.
“The committee endorses the stand taken by the RBI to eliminate the interface of institutions regulated by the RBI from cryptocurrencies. The Committee also recommends that all exchanges, people, trade, s and other financial system participants should be prohibited from dealing with cryptocurrencies.”
Accordingly, the Committee has recommended a law banning the cryptocurrencies in India and criminalising carrying on of any activities connected with cryptocurrencies in India.”
The Public-Private Confusion
Bhan’s comments followed conflicting reports regarding the bitcoin’s legal status in India. Bloomberg Quint in early June claimed that the Narendra Modi government wanted to impose 10-year prison-time on cryptocurrency traders. The news service cited a piece of paper that allegedly was a part of an anti-crypto draft bill. A month later, another document from the same law showed that the Indian government was looking to ban cryptocurrencies.
Nevertheless, Ministry of Finance representative Anurag Singh Thakur told Rajyasabha that such a ban was not official. He wrote in response to lawmakers that a government-appointed Interministerial Committee is looking into the matter. Excerpts:
“In the absence of a globally acceptable solution and the need to devise a technically feasible solution, the Department is pursuing the matter with due caution.”
Bhan’s foundings reveal that the Garg committee has reached its conclusion. Nevertheless, the senior reporter did not exclusively mention ‘bitcoin’ or similar decentralized cryptocurrencies. On the other hand, her report only quoted the committee’s take on so-called “private cryptocurrencies.”
bitcoin is a public cryptocurrency. Could you elaborate what do they mean by private cryptocurrencies?
— Yashu Gola (@whoisyashu) July 22, 2019
Private cryptocurrencies typically refer to tokens issued by an organization as securities or utilities. Facebook’s Libra, for instance, is a native token of a permissioned blockchain whose distribution and issuance relies on a single entity known as the Calibra Association. Bitcoin, on the other hand, gets mined and distributed by a global network of miners, who also maintain its blockchain – a permissionless digital ledger.
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