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Breaking | India: ‘No proposal to recognize Bitcoin as a currency,’ says FM

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The winter session of the Indian Parliament commenced today and as expected, cryptocurrencies are also on the agenda. Out of the 26 draft legislations to be tabled, the crypto-bill is one of them, with the contents of the same fueling a lot of FUD recently.

Now, the country’s Finance Minister has claimed that there is no proposal to recognize Bitcoin as a currency. The aforementioned response was part of a written reply to the lower house of the parliament.

While more clarity is set to emerge in this context, some reports have claimed that the Indian administration is planning to make cryptocurrencies available as an asset. Additionally, others suggest cryptos will not be accepted as legal tender.

Additionally, the minister also told the Parliament that the “government does not collect data on Bitcoin transactions.”

This is a crucial piece of information, especially since some bodies associated with the ruling party had called for central regulation of crypto. For instance, Swadeshi Jagaran Manch’s (SJM) Co-convenor Ashwani Mahajan had suggested

that crypto-data around mining and transactions be stored only on domestic servers.

As far as its legality is concerned, the Ministry of Finance said in a written note today,

“Cryptocurrencies are unregulated in India. RBI 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.”

Here, it is also noteworthy that the opposition had recently accused

the ruling party and the Indian PM of a Bitcoin Scam “coverup.”

In the Parliament earlier today, the government responded to that question, stating,

“Information in public domain suggests that a case of cybercrime involving Bitcoin has been under examination by the Karnataka police.”

The govt. also added that Law Enforcement Agencies (LEAs) have taken legal action as per provisions of law against the offenders. Worth noting though that the government believes “further disclosure of information in the matter is not in larger public interest.”

On the CBDC front, the central bank has also submitted a proposal to the Parliament. In the same, it aims to amend the RBI Act to include digital currency, the finance minister noted.

Here, it is also noteworthy that the RBI is reportedly working on a “phased implementation strategy” to introduce the Central Bank Digital Currency to Indian users. This will allow the scope of banknotes to be expanded without much disruption to the financial market.

This is a developing story and will be updated…

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