An Indian government panel has recommended banning all private cryptocurrencies and a jail term of up to 10 years and heavy fines for anyone dealing in digital currencies, which could signal the end of them in India.
The panel drew up a report and draft legislation, which will be examined by the government and regulators before they make a final decision, the government said in a statement on Monday.
The panel has, however, asked the government to consider the launch of an official government-backed digital currency in India, to function like bank notes, through the Reserve Bank of India.
The new tough crypto regulation is a part of a recently proposed draft bill called “Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019,” according to a report by crypto news outlet The Block.
The regulation will reportedly relate to those who mine, hold, buy and sell cryptocurrencies, as well as those who deal with cryptocurrencies directly or indirectly in the country.
“The Committee notes with serious concern mushrooming of cryptocurrencies almost invariably issued abroad and numerous people in India investing in these cryptocurrencies. All these cryptocurrencies have been created by non-sovereigns and are in this sense entirely private enterprises,” the report, – which you can read here – says.
The government panel, headed by finance secretary Subhash Chandra Garg, recommended a fine of up to 250 million rupees ($3.63 million) and imprisonment for up to 10 years for anyone who mines, generates, holds, sells, transfers or issues cryptocurrency.
“There is no underlying intrinsic value of these private cryptocurrencies,” the panel said in its report submitted to the finance ministry.
Private digital currencies were created by non-sovereigns and lacked the attributes of currency, it said.
Industry officials expressed dismay and the hope the government would not introduce a ban.
“If the government decides to take such a drastic step then India will stand to lose out significantly on the technology front,” said Sathvik Vishwanath, co-founder, Unocoin, an Indian virtual currency.