The draft law the ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’ in India, elaborated after a committee examined the legality of cryptocurrencies and blockchain and has submitted its report to the Finance Ministry, recommends that private cryptocurrencies be banned completely in India.
A fine and imprisonment of up to 10 years for offences were proposed. The government had constituted an Inter-Ministerial Committee on November 2, 2017, under the Chairmanship of Economic Affairs Secretary Subhash Chandra Garg and comprising senior officials of the Ministry of Electronics and Information Technology, SEBI and the RBI. The report highlights the fact that cryptocurrencies do not have any intrinsic value of their own and lack any of the attributes of a currency. “Therefore, the Committee is of clear view that the private crytocurrencies should not be allowed,” the report said. “These cryptocurrencies cannot serve the purpose of a currency.
The private cryptocurrencies are inconsistent with the essential functions of money/currency, hence private cryptocurrencies cannot replace fiat currencies.” The door remains open only for the central bank issued cryptocurrencies. The draft law says that anybody who mines, generates, holds, sells, deals in, transfers, disposes of or issues cryptocurrencies with will face a fine and/or jail time.