Indian government addressed the issue of crypto assets today. It emphasized the aim to eliminate the use of crypto assets in funding illegitimate activities or as part of the payment system.
In a letter, replying to the Rajya Sabha, Minister of State for Finance, Pankaj Chaudhary stated that the government is investigating the blockchain system to boost India's digital economy. The letter noted that cryptocurrency does not qualify as legal tender in the country. The government is actively working towards quashing illegal crypto rackets like money laundering and data breaches.
“The government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system,” said Pankaj Chaudhary.
IMC report: ban private crypto assets
A recent report by the High-Level Inter-Ministerial Committee (IMC), constituted under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose specific actions to be taken in this matter, suggested against private cryptocurrencies. It recommended that all private cryptocurrencies should be banned in the country, except any state-issued cryptocurrency.
Furthermore, Pankaj Chaudhary confirmed that the government will take action referring to the IMC report. If the government reaches a consensus for a legislative proposal, the same will be presented in the upcoming Parliament sessions, following due process.
Minister of State for Finance, Bhagwat Karad also wrote a letter to the Rajya Sabha, replying that the public sector banks (PSBs) have seized over Rs. 4.5 Crores from defaulters in NPA and written-off accounts, in just five years span. Additionally, the authorities have also confiscated a total of Rs 20,334 crore from defaulters who deliberately committed fraud, dated March 31, 2021.
Karad added that RBI has informed the government that since 2019 the rate of wilful defaulters has reduced since government efforts to curb illegal crypto activities have increased. According to CRILC data from nationalized banks, during 2019-20, the number of defaulters was at the high of 248, which has decreased to 156 during 2020-21.