Indian Government Answers Important Questions about Crypto

The Indian government has given answers in the parliament to a number of questions pertaining to bitcoin transactions, the legality of crypto exchanges and trading in India and Karnataka’s high-profile Bitcoin scam. In addition, the winter session of the Parliament’s lower house, Lok Sabha, has also begun, in which the proposed crypto bill will be taken up. The Indian Ministry of Finance gave answers to different sets of questions on Monday regarding crypto and bitcoin in Lok Sabha. The first set of questions were related to Bitcoin transactions and Nirmala Sitharaman, the Finance Minister, was asked if the government was aware of the booming bitcoin transactions in the country.

The finance minister responded that the government was not collecting any data relating to bitcoin transactions. When questioned about the matter of bitcoin being recognized as a currency, she responded with a no. The second set of questions were about the prominent bitcoin scam in Karnataka that had received heavy media coverage recently. Basavaraj Bommai, the Chief Minister of Karnataka, had even brought up the case during a meeting with Prime Minister Narendra Modi. The finance minister was asked questions about the scam, details of the investigations and the actions that were being taken.

Shri Pankaj Chaudhry, the Ministry of Finance’s Minister of State, responded that the Karnataka police were examining a case of cybercrime related to bitcoin, but the Bangalore Zonal Unit of the Directorate of Enforcement had also registered a case for the matter. He added that providing further details of the case were not in public interest. The third set of questions that were put forward to the finance minister were about whether they were aware of the cryptocurrencies traded in the country. Minister Chaudhry said that the government was not collecting information about crypto trading.

The legal status of crypto exchanges and the permissibility in regard to crypto trading was the next question that was put to the finance minister. Furthermore, she was also asked to provide details of any Accts that were applicable to crypto exchanges and cryptocurrencies in general. Minister Chaudhary responded that crypto was unregulated in India. He elaborated that the RBI i.e. Reserve Bank of India had issued a circular on May 31st, 2021 in which all regulated entities had been advised to conduct customer due diligence according to the standards of anti-money laundering (AML) know-your-customer (KYC) and combating of terrorism (CFT) rules.

The winter session of the Parliament in India will also see a crypto bill discussed, but it wasn’t listed on the agenda for Monday or Tuesday. The bill has been given the title ‘The Cryptocurrency and Regulation of Official Digital Currency Bill 2021’, which is aimed at prohibiting all private crypto in the country, but would include some exceptions. The bill is also said to provide a framework that would facilitate the launch of the official digital currency by the RBI. Previously, the Reserve Bank of India had disclosed that it was working on developing a CBDC. The contents of the crypto bill are not public, due to which there has been a lot of speculation.

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