At a meeting with cryptocurrency stakeholders, government officials said cryptocurrencies won’t be banned but need to be regulated as soon as possible.
Expressing concern over the security of investors’ money in cryptocurrencies investments and transactions, the government on November 15 indicated that it may not ban the digital currency but may bring in a regulation soon. "Crypto cannot be stopped but must be regulated," government officials said at a meeting with cryptocurrency stakeholders, according to a person close to the development, who spoke to Outlook Money.
The meeting between the Parliamentary Standing Committee on Finance and cryptocurrency industry members was chaired by Bharatiya Janata Party (BJP) MP and former Union minister Jayant Sinha, on the subject of “CryptoFinance: Opportunities and Challenges”. Ahead of the meeting, Sinha told PTI, “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 crypto finance.”
While there was a consensus that a regulatory mechanism was required, but there was no decision made on who the regulator could be, according to sources cited by news agency ANI. An MP reportedly expressed concern over full-page crypto advertisements being featured in national dailies.
The government is likely to hold more such talks with cryptocurrency stakeholders and experts in the future, said the person who spoke with Outlook Money.
The cryptocurrency industry has been responding positively to the issue of regulation. “This is not just imperative for users' security but also for holistic industry growth. While the regulations are still evolving, it becomes the utmost responsibility of all the stakeholders to operate carefully. In regard to money laundering and terror financing, it is better if strict policies and security infrastructure are adopted by all platforms,” says Kumar Gaurav, founder and CEO of Cashaa, a cryptocurrency platform.
The meeting followed Prime Minister Narendra Modi’s warning against misleading advertisements on cryptocurrencies, and Reserve Bank of India governor Shaktikanta Das’s cautious stance last week.
"Advertisements and social media trends certainly have an influence on the consumption patterns of the viewers and many times retail investors do not have the time or the means to do strong research before investing. Therefore, it certainly makes sense to monitor and regulate how organizations present their offerings. Any advertisements making false promises or overpromises must be taken down immediately,” says Gaurav.