PM Modi said democratic nations work together on crypto currency and ensure it does not end up in wrong hands, which can spoil our youth
MUMBAI, Nov 18 (The CONNECT) – Will India ban crypto currency?
This question arises as Prime Minister Narendra Modi broke the government’s prolonged silence on the burning topic.
Delivering the keynote at the inaugural Sydney Dialogue via video conferencing today, Modi spoke about creating standards and norms for data governance and for cross-border flow that protect and secure data. “It should also recognise national rights and, at the same time, promote trade, investment and larger public good,” he said and briefly referred to the hot topic: “Take crypto-currency or bitcoin for example.” “It is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth,” the Prime Minister said without elaborating.
In all likelihood, Indian will take lead in taking a strong position on crypto.
An Inter-Ministerial Group in November 2017 has already recommended banning of private cryptocurrencies, given the risks associated with them and volatility in their prices.
A cryptocurrency is a type of currency which uses digital files as money, according to Wikipedia. Usually, the files are created using the same ways as cryptography (the science of hiding information).
In the Report, the Group has highlighted the positive aspect of distributed-ledger technology (DLT) and suggested various applications, especially in financial services, for use of DLT in India. The DLT-based systems can be used by banks and other financial firms for processes such as loan-issuance tracking, collateral management, fraud detection and claims management in insurance, and reconciliation systems in the securities market.
But a final decision is expected soon with the interest in the unregulated market spreading like wildfire.
Analysts are divided on the government’s expected policy on the issue. Some feel that the government will finally allow crypto trading in a controlled atmosphere taking care of fears of terror finance and money laundering. “It is therefore important for investors to wait and watch for the regulation and not to rush into investments at this juncture,” said one investment advisor.
Aarun Kejriwal, Director of Market Research firm KRIS, however feels that the parallel currency will have to be banned. He reminded that RBI Governor Shaktikanta Das has been opposing crypto currency.
Some media reports predicted that the government may take a mid-path and regulate crypto currency.
The unregulated Crypto currency has been the talk of the town for some time with some reports suggesting that India has emerged as the largest market. One of the main concerns is that the channel might facilitate money laundering.
“I hope it will be banned as the government cannot be seen as backing this system when it is committed to lean up the system,” Kejriwal said.
“Crypto currencies are growing, and we are positive it will lead the market,” said Naveen Kumar, Founder, BITSZ, while launching the new crypto exchange platform.
“There is a lack of awareness of digital currency, and this issue can get solved with the support of this platform. Extensive efforts have been made to launch a platform that provides insurance for all accounts. BITSZ is the only platform in the market that ensures every user wallet is secure, compared to other platforms in the market. The platform does not have bugs, and supports Anti-Money Laundering.”
Interacting with the audience Naveen said, “It is really exciting to see so many youngsters and crypto enthusiasts showing so much interest in BITSZ.”
The Prime Minister’s concern is viewed in the context of the crypto becoming popular among the youth.
On the reports of regulation plans, Kumar Gaurav- Founder and CEO, Cashaa- blockchain-based fintech said it certainly makes sense to monitor and regulate how organizations present their offerings. “Any advertisements making false promises or overpromises must be taken down immediately. This is not just imperative for users' security but also for a holistic industry growth,” he said.
“In regard to money laundering and terror financing, it is better if strict policies and security infrastructure are adopted by the platforms, like we do at Cashaa along with United Multistate Credit Cooperative Society," he said.