India has received plenty of press regarding crypto regulations in the previous months. The strict policies of the country could even be compared to that of China’s. However, a former finance ministry official suggests that there’s little that can be done to stop Indian residents adopting cryptocurrencies.
Shaktikanta Das said that the Indian government would have a tough time regulating cryptocurrencies. Das is the country’s former secretary of economic affairs. He also led the first regulation panel that aimed to control cryptocurrencies.
Das said in an interview that “regulating cryptocurrencies is impossible”. He cited the transaction process of digital currencies as an example. Exchanges happen inside the houses of users and entering each person’s home is somewhat impractical, implied the G-20 Sherpa.
He added that the country should stop implementing further crypto regulations because it’s just a waste of effort and resources. Das is currently a member of the 15th Finance Commission and is tasked to review the financial situation of the government.
India’s crackdown on cryptocurrencies isn’t a new thing. In fact, it has been around since 2013, when the Reserve Bank of India (RBI), the country’s central bank, cautioned the public regarding the use of digital coins.
They issued multiple warnings, talking about security threats and extreme volatility — but to no avail. The public wasn’t deterred, and the revolutionary blockchain technology was still warmly welcomed by most, including conservative investors.
Two finance ministry committees were set up by the government to deal with the uncontrollable rise of the crypto market. The first committee was set up in April 2017, with Das leading the board. They aimed to find ways to ban digital coins.
They were dead-set on the goal at the beginning. However, in the long run, they couldn’t find any sustainable method to implement a total ban. Then there was the second panel which was headed by Subhash Garg, the current secretary of economic affairs. As of now, Garg and the panel are still determining whether cryptos should be banned or not.
Arun Jaitley, the finance minister of the country, said that the Indian government doesn’t recognize cryptocurrencies to have any legal value. He even added that they are going to do whatever they can to stop people from using them.
What’s surprising about his statement is that he clarified that it didn’t matter for what purpose the digital coins are used. Whether it’s through financing criminal activities or just as a means of casual commodity exchange between businesses and individuals, as long as the activity uses cryptocurrencies, then it’s downright illegal.
That’s how serious the Indians are in implementing their strict zero-crypto tolerance policy. Ironically, it turns out that this just fanned the fires of the crypto hype in the country.
There are many reasons why the Indian government is a staunch critic of cryptocurrencies. Firstly, its anonymous nature which doesn’t require the identity of the persons involved in a transaction. Then there’s its extreme volatility, which makes it hard for the market to forecast its value. However, Das thinks that the most significant reason why India hates cryptos is due to its lack of asset base.
Das said that the values applied to digital coins are created out of thin air because people love to put a value on intangible things. He also talked about the rights of the RBI as the only institution to produce and circulate currencies in the country.
This makes it illegal for any currency, including cryptocurrencies, to be used in transacting monetary exchanges in India. The 63-year-old commissioner continued saying that cryptocurrencies are dangerous because they can be used in money laundering and terrorist financing.
Cryptos will pose a serious threat not only to the financial stability of India but to the entire world as well, added Das. India now sits side by side with China in sharing the same views about cryptocurrencies. China shut down all crypto exchange platforms in the country last year.