A government note circulated by the government on the cryptocurrency bill suggested regulating private cryptocurrency rather than banning it. The note also states that crypto will not be recognized as a legal tender in India. In addition, the legislation describes cryptocurrency as Cryptoasset, according to the note.
Cryptocurrencies will be treated with existing cryptographic exchange platforms, which will be regulated by the Securities and Exchange Board of India (SEBI). A deadline will be prescribed for those who hold cryptocurrencies to declare the same and enter under crypto exchange platforms – which will be regulated by the market regulator.
The proposed virtual currency of the Reserve Bank of India (RBI) has not been affected by the new cryptocurrency bill. However, the central bank will regulate cryptocurrency issues.
All those found violating the exchange provisions will be punished with criminal imprisonment of up to one and a half years. The regulatory authority can also apply sanctions in the range of 5 to 20 million lei.
In order to discourage those who use these assets for terror-related activities, the provisions of the Law on the Prevention of Money Laundering (PMLA) will apply with appropriate amendments.
Earlier this week, Finance Minister Nirmala Sitharaman said the risk of the cryptocurrency getting into the wrong hands is being monitored. The minister also stated that there is no decision to stop advertising for digital currencies.
Ms Sitharaman added that the government has no plans to recognize Bitcoin as the country’s currency and that the government does not collect data on Bitcoin transactions.
The government said it had received a proposal from the RBI to include digital currency in the definition of a “banknote”.
In October, the RBI introduced the Central Bank’s (CBDC) digital currency proposal. CBDCs – digital or virtual currencies – are the digital version of fiat currencies, for example, the Indian rupee.