Yesterday, in an online discussion with India’s leading cryptocurrency industry players, the country’s former Finance Secretary, Mr. Subhash Chandra, said that ‘crypto assets’ should be regulated, but with ‘rules.’ Garg previously headed the Inter-Ministerial Committee that drafted a draconian bill banning cryptocurrencies in India.
Maybe We Can Try to Regulate it (Crypto) as a Commodity: Garg
As per the draft of the crypto ban bill that surfaced in 2019, anyone possessing Bitcoin or other virtual currencies should serve a 10-year jail term and pay INR 25 crores (US$3.2 million) as fine.
The webinar hosted on July 17, by crypto research startup CREBACO Global, law firm Khaitan and Co. and blockchain VC firm Block On was an attempt to discuss the thoughts that went behind the drafting of the bill and the possible regulations for cryptocurrencies in India.
Defending the bill’s clauses and the bill itself, Mr. Garg said it intended to ‘protect the people who don’t understand the technology.’ Also, he likened cryptocurrencies to ‘counterfeit money’ and quoted that as the reason for drafting the conditions in the bill. He said:
Crypto is similar to counterfeit currency, therefore its regulations are so stringent including 10 yrs of imprisonment and a fine up to 25 Crore rupees.
He went on to comment that cryptocurrencies work on distributed ledger technology, which is a ‘high-investment technology and that it can never be a ‘common man’s currency.’ Advocating his concern for technologically agnostic folks, Garg remarked:
It is the public’s, Government’s duty to protect the gullible people. It is the government’s duty for the people who don’t understand need to be protected.
But, despite his reservations regarding the ‘currency’ aspect of crypto, he seemed optimistic towards application prospects of blockchain technology. He also said that ‘crypto assets’ can function as commodities but ‘with rules.’ Mr. Garg also suggested also favored dematerialization (demat) of the country’s official fiat currency, the INR.
Cryptocurrency is Not the Replacement for the Indian Currency
Contradicting Subhash Garg’s thoughts on cryptocurrencies finding applications as an alternate currency, Nischal Shetty, founder and CEO of WazirX, said that “cryptocurrency is not a replacement to INR.”
Nischal even pointed out that there is ambiguity regarding the same in the draft bill as well. This shows that there is a clear misunderstanding amongst folks who created the bill in the first place.
Reputed lawyer and Khaitan and Co. partner Mr. Sanjay Khan Nagra also seconded Shetty’s stance and stated that although cryptocurrencies are similar to the currently operating currency system, their objective is not to replace fiat. He said:
Crypto has all attributes of the current currency but it’s not here to replace it.
Both, however, welcomed the Former Finance Secretary’s opinion of regulating cryptocurrencies as assets.
An Outright Ban is Not At All the Solution
The webinar saw CREBACO boss Siddharth Sogani share practical suggestions on regulating crypto as well. As per his thoughts, there is absolutely no need to be scared of crypto. Instead, government regulators and policymakers should help it grow as the technology holds tremendous promise.
Mr. Nagra added to this by saying that crypto is in front of us and here to stay. Looking away would not be a great idea. On that, Mr. Sogani commented:
Out of all G20 nations, 18 of them already fully or partially regulate cryptocurrencies. And they don’t treat crypto holders as criminals like how the draft bill mentioned.
Overall, the webinar was the first of it’s kind and served to provide considerable clarity on the status of virtual currencies in India. It was the beginning of more such talks that are scheduled to happen in the upcoming future.