Parliamentary panel may recommend govt for action on monitoring crypto
In this news:
Key takeaways
- A parliamentary panel has examined virtual digital assets for over a year.
- The committee may recommend monitoring crypto transactions and using new technology.
- India currently does not recognize crypto as a legal asset and warns of risks.
A parliamentary panel may recommend to the government how to monitor cryptocurrency transactions and what to do legally with such digital assets, a source aware of the matter said.
The Parliamentary Standing Committee on Finance, headed by BJP MP Bhartruhari Mahtab, has examined various aspects of Virtual Digital Assets (VDAs), a legal term for cryptocurrencies and non-fungible tokens (NFTs), for over a year and held more than half a dozen meetings.
The panel is currently preparing its report for submission to the Speaker of the Lok Sabha.
Parliamentary recommendations on digital assets
There is a possibility that the committee may recommend to the government action for monitoring of cryptocurrency transactions and wider consultations on what to do legally with all such digital assets, the source said.
The panel is also likely to suggest that the government bring in the latest technology for stricter monitoring of all digital assets.
India does not recognise crypto as an asset and has issued no direction to regulate them in the country.
Government stance and regulatory actions
In the past, the government informed Parliament that crypto assets are by definition borderless and require international collaboration to prevent regulatory arbitrage.
It also said that any legislation for regulating or banning virtual digital assets can work only with international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards.
Last month, the Ministry of Finance announced to the general public that crypto products and NFTs (non-fungible tokens, unique digital certificates) are unregulated and can be highly risky.
There may be no regulatory recourse for any loss from such transactions, it said.
The Director, Financial Intelligence Unit-India (FIU-IND), which comes under the Ministry of Finance, recently issued notices for non-compliance to 15 Virtual Digital Assets Service Providers (VDA SPs) under the Prevention of Money Laundering Act, 2002(PMLA).
The VDA SPs were brought into the ambit of Anti Money Laundering/Counter Financing of Terrorism (AML/CFT) framework under the provisions of the Prevention of Money Laundering Act, 2002 in March 2023.
Cryptocurrency is a digital currency which makes use of encryption to regulate the generation of units of currency and to verify the transfer of funds, operating independently of a central bank.
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