The government’s Cabinet note on the proposed cryptocurrency bill suggests regulating private cryptocurrency rather than outright banning it.
The government’s Cabinet note on the proposed cryptocurrency bill suggests regulating private cryptocurrency rather than outright banning it. Cryptocurrencies will not be recognised as legal tender in India, according to the memo. According to the letter, the legislation also refers to cryptocurrency as a cryptoasset.
Existing crypto exchange platforms will deal with cryptoassets, which will be regulated by the Securities and Exchange Board of India (SEBI). Those with cryptoassets will have a deadline to declare them and bring them under the control of crypto exchange platforms, which will be controlled by the market regulator.
The Reserve Bank of India’s (RBI) proposed virtual money has not been included in the new crypto law. The central bank, on the other hand, will regulate cryptocurrency issues.
Those caught in violation of the exchange provisions face a maximum sentence of one and a half years in prison. The regulator may impose fines ranging from 5 crore to 20 crore.
The provisions of the Prevention of Money Laundering Act (PMLA) would apply with appropriate revisions as a deterrent to anybody detected utilising these assets for terror-related activities.
Finance Minister Nirmala Sitharaman warned earlier this week that the possibility of cryptocurrencies falling into the wrong hands is being watched. The minister also indicated that no decision has been made to prohibit the advertising of digital currencies.
Ms. Sitharaman went on to say that the government has no plans to recognise Bitcoin as a currency in the country, and that it does not collect statistics on Bitcoin transactions.
The government claimed it has received a request from the Reserve Bank of India to include digital currency in the definition of a “bank note.”