India Clarifies Its Status over Virtual Currencies

Some questions with regard to crypto were taken and then duly answered by the Indian Finance Ministry recently wherein the Ministry disclosed its plans on how it would like to deal with virtual currencies, their trading as well as what plans it has undertaken to protect Indian crypto investors. The Minister reveals that the upcoming crypto law containing all clarities with regard to crypto is still under Parliamentary Committee’s consideration.

There are two types of Parliaments in India. One which is called Rajya Sabha i.e. the Upper House and the second, the Lok Sabha i.e. the Lower House. Some questions with regard to the Indian Lower House’s Committee’s consideration over crypto trading in India were taken by the Indian Finance Minister.

The first question taken by Shri Pankaj Chaudhary, State Minister for Finance Ministry was relating to the trading virtual currencies in the country. He responded to the question by suggesting that the Government had not collected any information on this point. His response is in line with his earlier statement where he revealed that the Government isn’t aware of how many exchanges are there. Nor is there any crypto-related fraud on Indian soil with which the Government is aware of.

The next question that the Minister took was concerning the development regulatory climate around the Indian crypto market. Chaudhary responded that the Reserve Bank of India (RBI) is the relevant authority through which all entities are supervised and regulated. He informed that the Government has requested RBI to conduct due diligence of banking customers with regard to certain regulations. He suggested that RBI is currently looking at whether entities are fulfilling requirements of laws namely AML, KYC, and PMLA.

The third question was asked by the Minister was on the subject of investor protection. It was asked what the Indian Government was doing to protect Indian crypto investors against crypto frauds and infamous apps. The Minister said that the Penal Code, 1860 is the exclusive law dealing with the instances of any type of fraud. He then commented that other than the penal code, there are laws that particularly deal with matters of corporate and financial crimes.

The Last question posed before the Minister was regarding India’s future legislation for virtual assets trading and businesses associated with it. The Minister stressed that already he had responded to this question several times. He then went on to reiterate that the Government’s viewpoint on virtual currencies is crystal clear. He explained that to the Government neither the virtual currencies nor any of their byproducts such as crypto tokens are legal tenders.

He reaffirmed that the Indian Government through its functionaries will make sure that both of them remain outside the payment mechanism system. In fact, the Government is already taking measures for the elimination of illicit activities arising from the illegal usage of crypto. He was referring to the misuse of crypto for activities such as terror financing, ransomware, and money laundering.