NEW DELHI:In order to clarify its stand on cryptocurrency and come up with better regulations, the government will come up with a detailed paper on the digital currency by September this year.
“The government will finally come up with detailed guidelines on cryptocurrency. The draft is ready and consultation is on with all the stakeholders, including market regulator SEBI, India’s central bank RBI and the Internet and Mobile Association of India (IAMAI) before coming up with the final paper. We expect it to be ready by September,” a senior official from the Finance Ministry told TNIE.
The ministry has constituted an interdisciplinary committee under the chairmanship of Special Secretary (Economic Affairs) to examine the regulatory framework regarding the virtual currency. According to the official, SEBI and RBI have expressed some reservations regarding clauses in the initial the draft.
“Cryptocurrency is a new phenomenon and naturally, governments across the globe are struggling with it. Most of the officials have serious reservations against it, which all of us agree with. However, we want to arrive at a common conclusion. There must be an appropriate mechanism to regulate the same,” the official said.
What has initiated this move was also the fact that earlier this month, the IAMAI had moved the Supreme Court seeking a stay on the RBI circular that effectively disallowed dealing in cryptocurrencies. Even though the court refused to stay the RBI circular, it asked RBI to come up with its response within three weeks.
A three-judge bench headed by Chief Justice Dipak Misra acceded to the request made by the petitioners and the matter has been listed for final disposal on September 11. The IAMAI was represented by Advocate Gopal Subramanium, while Advocate Shyam Divan appeared for RBI. On Friday, the RBI also informed the court that allowing dealings in cryptocurrencies will encourage illegal transactions, with Divan stating that the policy of the RBI is of “extreme caution”.
“The government is yet to get a detailed response from the RBI and SEBI in this regard and as soon as it comes, it will incorporate the views in the draft,” the official said.In a statement on April 5, the RBI had said that such currencies raise concerns of consumer protection, market integrity and money laundering, among others. “In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs,” it had said. The ban came into effect on July 6, after the SC refused to grant a stay on the ban.