Government plans to regulate cryptocurrencies through SEBI | Fusion - WeRIndia

The Government of India is planning to regulate cryptocurrencies rather than ban them. It decided to introduce a new bill on cryptocurrencies in Parliament soon.

The Union Cabinet circulated a special note on this matter, stating that the cryptocurrency would not be recognized as legal currency in India, but it was described as Cryptoasset.

There will be crypto exchange platforms to deal with Cryptoassets. Securities and Exchange Board of India (SEBI) regulates these exchange platforms.

As investors need to declare their Cryptoassets to the crypto exchange platform, they cannot keep this currency on foreign exchanges or in their private wallets. Soon the cut-off date will be prescribed to declare their cryptoassets, and all those who have these assets should follow the specified guidelines.

Those who violate exchange provisions will have to bear legal consequences with imprisonment of up to one and a half years.  Besides, they will be levied a penalty of up to ₹20 crores by SEBI.

To prevent the misuse of cryptocurrencies for illicit activities, the government proposes to amend the Money Laundering Act (PMLA).

Earlier, finance minister Nirmala Sitharaman said that the government is working to bring a new Bill, the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, on cryptocurrencies. The Bill will be placed in the current session of Parliament. The ongoing winter session is scheduled to be continued till December 23, 2021.

The bill originally sought to ban all private cryptocurrencies in the country, with certain exceptions. However, later, the government wants to bring it under the regulatory ambit of SEBI rather than ban it.

The Reserve Bank of India is creating Central Bank Digital Currency (CBDC). It will be governed by the RBI itself. It has not clubbed with the new cryptocurrency bill.

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