No proposal to recognize Bitcoin as currency, says Indian finance minister

The Lok Sabha, the lower house of India’s bicameral parliament, will debate and deliberate on the cryptocurrency bill before the upper house of parliament considers it, after which it will be sent to the president for promulgation.

The winter session of the Indian Parliament has started in New Delhi. There is a lot to discuss, including the bill to ban all private cryptocurrencies in favor of central bank digital currency, with a few exceptions. The bill also describes the introduction of a central bank digital currency. The central bank’s digital currency will be backed by sovereignty, at the same level as cash. One of its main goals is to avoid the volatility to which private cryptocurrencies are subject.

This bill follows the meeting between critical representatives of the crypto industry and Indian MPs to glean information in order to paint a general picture of the cryptocurrency situation in India.

No KYC / AML for unregulated institutions

A question was posed by a Member of Parliament to Lok Sabha, the lower house of Indian Parliament, regarding the future of bitcoin as a currency in India. Finance Minister Nirmala Sitharaman then established that bitcoin would not be recognized as a currency.

Thirumaavalavan Thol, an MP, asked ministers if the government knows what cryptocurrencies are traded in India, whether cryptocurrency trading is legal in India, and whether centralized exchanges are allowed by law to operate in India. The minister of state said the Reserve Bank of India issued a memorandum in May to regulated institutions to comply with Know-Your-Customer (KYC) and anti-money laundering (AML) and anti-money laundering (AML) against terrorist financing, but that cryptocurrency institutions are not regulated in India. Therefore, they did not receive the same memorandum.

According to an Indian lawyer, after the bill is introduced in the Lok Sabha, the bill can be sent to a standing committee which can meet with experts, who would then prepare a report to send to the Lok Sabha. There would then be deliberation and debate by the Lok Sabha, and if the bill is approved, it would be sent to the Rajya Sabha, the upper house of Parliament. The Rajya Subha would then engage in similar deliberations. If they voted for the bill, the bill would be escalated for the president to ratify, making the bill an act. Thus, the bill itself will undergo various processes before being enacted. This should allay fears of an outright ban.

The weight of the Indian pandit on the bill

Indian blockchain evangelist Sharat Chandra is uncomfortable with the cryptocurrency bill’s definition of “private cryptocurrencies”. He believes the government should make AML and KYC rules mandatory to legitimize cryptocurrency activities, in line with Financial Action Task Force rules, instead of banning cryptocurrencies on the assumption that they will be used for trading. money laundering activities. Kazim Rizvi, of a privacy policy think tank called The Dialogue, believes the public nature of Ethereum and Bitcoin excludes it from the list of “private cryptocurrencies,” since transactions exist on a publicly visible ledger. He also believes that cryptocurrencies created by private companies have greater criminal potential and that their ban by the government should be seen as a blessing.

When the new bill was announced, it sparked fears among Indian investors, with WazirX bitcoin prices falling 12.2%, compared to 1.8% globally.

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