Bitcoin, Ether, other cryptocurrencies in India: Strong regulatory steps coming?

Bitcoin, Ether and other cryptocurrencies have unofficially cemented their positions in India, but as far as government is concerned there are many problems with them of a serious nature that need to be solved. These problems that cryptocurrencies like Bitcoin, Ether and others, create pose a serious danger to the macro-economy, the individual investors as well as to the safety and security of the country. In a meeting on the way forward on cryptocurrencies held on Saturday that was chaired by PM Narendra Modi on the way forward on the issue, these crypto concerns were reiterated. Significantly, as a result, there may well be strong regulatory steps coming soon form the government side. If some people expected good news on crypto presence in India, then that did not come. 

Here are the highlights of the meeting on cryptocurrencies in India:

1. Concern was expressed over misleading claims of huge profit being made by people on cryptocurrency investments

2. Government sources asserted that such unregulated markets cannot be allowed to become avenues for "money laundering and terror financing".

3. Attempts to mislead the youth through over-promising and non-transparent advertising should be stopped. It signals that strong regulatory steps are in the offing.

4. Government is cognizant of the fact that this is an evolving technology, it will keep a close watch and take proactive steps.

5. There was consensus also that the steps taken in this field by the government will be progressive and forward looking.

6. Government will continue to proactively engage with experts and other stakeholders.

7. Since the issue cuts across geographical borders, it will also require global partnerships and collective strategies. Government consulted experts from across the country and the world. Global examples and best practices were also looked at.

8. The Reserve Bank of India (RBI), Finance Ministry, Home Ministry have done an elaborate exercise on it.

9. RBI has repeatedly reiterated its strong views against cryptocurrencies saying they pose serious threats to the macroeconomic and financial stability of the country.

However, as things stand, cryptocurrencies like Bitcoin and Ether are not banned in India. The Supreme Court in early March 2020 had scrapped the RBI circular banning cryptocurrencies. RBI thereafter, had said that it will come out with an official digital currency in the face of proliferation of cryptocurrencies like Bitcoin.