The Indian government has answered three sets of questions in
parliament regarding bitcoin transactions, the high-profile bitcoin
scam in Karnataka, and the legality of cryptocurrency trading and crypto
exchanges in India. Meanwhile, the winter session of parliament has
begun and a crypto bill is expected to be taken up during this session.
Indian Government Answers Questions About Bitcoin Transactions
On Monday, the Indian Ministry of Finance answered three sets of
questions on bitcoin and cryptocurrency trading in Lok Sabha, the lower
house of India’s parliament.
The first set of questions (Starred Question No. 12), titled “Bitcoin
Transactions,” ask Finance Minister Nirmala Sitharaman “whether the
government is aware that bitcoin transaction is silently blooming in
India in the recent years.” The finance minister replied:
The government does not collect data on bitcoin transactions.
Finance Minister Sitharaman was further asked “whether the government
has any proposal to recognize bitcoin as a currency in the country.”
She simply replied: “No, sir.”
Questions About the Bitcoin Scam in Karnataka
The second set of questions (Unstarred Question No. 196) are about
the high-profile “Bitcoin Scam in Karnataka,” which recently received
heavy media coverage. The case was even brought up by Karnataka Chief
Minister Basavaraj Bommai during his meeting with Prime Minister
Narendra Modi.
The finance minister was asked about the scam and details of the investigation and action being taken.
The Minister of State in the Ministry of Finance, Shri Pankaj
Chaudhary, replied: “Information in public domain suggests that a case
of cybercrime involving bitcoin has been under examination by the
Karnataka police … However, a case has also been registered by Bangalore
Zonal Unit of the Directorate of Enforcement. Further disclosure of
information in the matter is not in larger public interest.”
Questions About the Legality of Cryptocurrency Trading and Crypto Exchanges in India
The third set of questions (Unstarred Question No. 173), titled
“Cryptocurrency,” ask the finance minister “whether the government is
aware of the cryptocurrencies that are traded in India.” Minister
Chaudhary responded:
Government does not collect information on trading in cryptocurrency.
The finance minister was also asked whether cryptocurrency trading is
permitted in India and whether crypto exchanges are legal entities in
the country. In addition, she was asked to detail any Acts applicable to
cryptocurrency and crypto exchanges.
Minister Chaudhary replied: “Cryptocurrencies are unregulated in
India. RBI [the Reserve Bank of India] has vide its circular dated May
31st, 2021, advised its regulated entities to continue to carry out
customer due diligence processes in line with regulations governing
standards for know your customer (KYC), anti-money laundering (AML),
combating of financing of terrorism (CFT) and obligations of regulated
entities under Prevention of Money Laundering Act, (PMLA), 2002 in
addition to ensuring compliance with relevant provisions under Foreign
Exchange Management Act (FEMA) for overseas remittances.”
Winter Session of Parliament Begins
The winter session of parliament commenced on Monday. A cryptocurrency bill is listed to be taken up during this session. However, the bill is not listed on the agenda for Monday or Tuesday.
“The Cryptocurrency and Regulation of Official Digital Currency Bill
2021” seeks “to prohibit all private cryptocurrencies in India, however,
it allows for certain exceptions to promote the underlying technology
of cryptocurrency and its uses,” according to the legislative agenda for
the winter session of Lok Sabha.
The bill also provides “a facilitative framework for creation of the
official digital currency to be issued by the Reserve Bank of India.”
The RBI has previously said that it is working on a digital rupee which
it plans to launch in phases.
The Indian government has not made the content of the crypto bill public, which has led to much speculation about whether the government will ban cryptocurrencies, like bitcoin and ether, or provide a regulatory framework for them.
