Cryptocurrencies were on the agenda for the 19th meeting of the Financial Stability and Development Council (FSDC), a government body under the Ministry of Finance. Unfortunately though, the government stand on cryptocurrencies/ crypto assets still does not seem to have changed as the tone of the press release was extremely negative.
The press release was issued by the Ministry of Finance and first shared by blockchain regulatory analysis platform Crypto Kanoon, said:
The Council also deliberated on the issues and challenges of crypto assets/currency and was briefed about the deliberations in the high level committee chaired by the Secretary (Economic Affairs) to devise an appropriate legal framework to ban use of private crypto currencies in India and encouraging the use of Distributed Ledger Technology as announced in the Budget 2018-19.
The press release hinted that the government discussed about the issues and challenges regarding cryptocurrencies. This indicates that digital currencies are a problem in the eyes of the government. It further said that the government is working towards a legal framework to ban the use of cryptocurrencies. Whether a full ban will be enforced is anybody’s guess, but banning the use of ‘private’ crypto currencies does have broad implications which may even be applicable to cryptocurrency exchanges.
What private means is anybody’s guess, but the most likely option is that private refers to ‘personal’ crypto assets. One more inference could be that the government may be referring to private cryptocurrencies such as Monero or Dash, but that is highly unlikely because the government has not demonstrated sufficient expertise to understand these nuances.
However, if the government had to really ban cryptocurrencies, they could have already done it. What’s stopping them now? Looks like all these questions will be answered only when the government brings out its regulatory framework.
Crypto Dost View: The government seem to be taking their own decisions based on misinformation without consulting industry stakeholders. And that’s not good for the future of cryptocurrencies in India!