There have been concerns regarding investment potential and risks around cryptocurrencies.
Cryptocurrency can't be stopped but must be regulated, was the consensus in the meeting of the first-ever Parliamentary panel discussing the broad contours of Crypto Finance. The Standing Committee on Finance, chaired by BJP's Jayant Sinha, today met representatives of crypto exchanges, Blockchain and Crypto Assets Council (BACC), industry bodies, and other stakeholders to discuss concerns regarding the regulation and promotion of Cryptocurrency in India. There have been a lot of concerns from various quarters regarding investment potential and risks around Cryptocurrency in the country.
There was a consensus in the meeting that a regulatory mechanism should be put in place, though it's not clear yet who should be the regulator.
Security of investors' money was the most serious concern expressed in the meeting. A Member of Parliament who was part of the meeting expressed concern over full-page Cryptocurrency advertisements in national dailies. Experts said that Cryptocurrencies are some sort of investors' democracy.
The panel's meeting assumes significance as it comes days after Prime Minister Narendra Modi chaired a high-level meeting with officials from various ministries and RBI on the issue of Cryptocurrency.
"We have called stakeholders from across the industry including operators of major exchanges, members of CII as well as academics from the Indian Institute of Management (IIM) Ahmedabad, who have done a very thorough study on the crypto finance," Mr Sinha had told news agency PTI ahead of the meeting.
MPs now want government officials to appear before the committee and address their concerns. The official agenda of the meeting circulated to member MPs was, "Hearing of views of Associations/Industry experts on the subject - Crypto-Finance: Opportunities and Challenges".
Another MP pointed out that El Salvador is the only country to recognise Cryptocurrency as a legal tender.
The Finance Ministry has already held several meetings with stakeholders to discuss the issue of regulation. The Reserve Bank of India and Securities and Exchange Board of India have also voiced concerns about the unregulated growth of Cryptocurrencies in India, keeping vulnerable retail investors in mind.
"On crypto...we have serious concerns from the point of view of macroeconomic and financial stability. How the issue has to be dealt with - we have given our detailed suggestions to the government; as far as I know, the matter is under the active consideration of the government, and the government will decide," RBI Governor Shaktikanta Das had said on Wednesday at a Business Standard event.
The Supreme Court in early March 2020 had nullified the RBI circular banning Cryptocurrencies.
An MP who attended the meeting on Crypto-Finance today indicated that Government is planning to bring a new Bill to regulate Cryptocurrencies.
The new Bill may be brought in the winter session of Parliament starting on November 29, 2021.