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Inter-ministerial committee recommends ban on private cryptocurrencies in India

Inter-ministerial committee recommends a fine of up to Rs. 25 crore and imprisonment of 10 years for anyone dealing in them.

Jul 23, 2019 09:15 IST
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An Inter-ministerial panel, which was set up by government on issues related to the cryptocurrencies in India, has given its recommendations. This high level panel has suggested banning all private crypto-currencies in India.

This inter-ministerial also recommends a fine of up to Rs. 25 crore and imprisonment of 10 years for anyone dealing in them. Also, this panel has recommends to ban the blockchain system in selected areas of the country.

Recommendations

•    The committee recommends that all private cryptocurrencies, except any cryptocurrency which may be issued by the government, be banned in India.
•    Cryptocurrencies issued by foreign private enterprises should be completely banned in India.
•    Committee also proposed that exchanges, investors, traders and other financial intermediaries should be covered under this.
•    It also proposed that dealing in them (cryptocurrency) should be made a criminal offence.

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Punishment for using Cyrptocurrency in India

  • A draft law presented by the committee says that any direct or indirect use of cryptocurrency will be punishable offence in India.
  • Committee proposed a fine or imprisonment which shall not be less than one year but which may extend up to 10 years.
  • In case of repeated offence, it shall be punishable with imprisonment of up to five years that could extend to 10 years with a fine.
  • The fine could be three times the loss or harm caused by the person or three times the gain made by a person or up to Rs 25 crore.

Committee Format

A High level Inter-ministerial committee was constituted in November 2017 under the chairmanship of secretary, department of economic affairs. The committee was headed by finance secretary Subhash Chandra Garg who has proposed a draft bill “Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019.”

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