Kataryna Kovtun July 21, 2020
Subhash Chandra Garg, Former Secretary of Economic Affairs of India, believes that crypto-assets not be used as currencies but should be regulated as exchange commodities.
Subhash Chandra Garg announced this during an online conference with the founder of the research company Crebaco Siddharth Sogani and the CEO of the Indian cryptocurrency exchange WazirX Nischal Shetty.
In 2019, Garg headed the commission on the preparation of a bill to ban cryptocurrencies, according to which, in some cases, issuers, traders, and holders of cryptocurrencies face imprisonment for 10 years and a fine of up to Rs 25 crore (about $ 3.3 million).
The Indian cryptocurrency community opposed the bill. In response, Garg decided to discuss it with industry representatives for the first time. The legislator clarified that this bill does not imply the complete elimination of crypto assets from India’s financial system.
Subhash Chandra Garg Explains the Bill
Garg said he supports the use of cryptocurrencies as regulated goods, but they cannot function as currencies in the country. If some user will present “computer code” as a digital asset it should be considered a commodity.
Accordingly, such an asset should be regulated on a par with traditional exchange-traded products, and anonymous cryptocurrencies should be completely banned in the country. At the same time, Garg spoke positively about the Central Bank Digital Currencies (CBDC). He emphasized that digital currencies of the Central Bank will provide firms or individuals with better financial services.
The former Secretary of Economic Affairs of India does not find a rationale to use cryptocurrencies and believes that they will not be popular among the Indians. However, he said that unlike cryptocurrencies, blockchain technology has promising prospects as there are many use cases in the financial industry.
Nishal Shetty said in response that cryptocurrencies are necessary for blockchain development. Shetty gave Garg an example that to keep Ethereum running, it is necessary to make transactions in ETH. He suggested that cryptocurrencies should not be perceived as liquidators of the Indian rupee, but as an alternative means of payment, especially when there is no way to use traditional money.
In turn, Siddharth Sogani noted that blockchain and cryptocurrencies are a new technology that “is based on practical experience, not theories from books.” The government should not ban cryptocurrencies out of fear but should understand how they work and help develop the industry.
Recall that in April, Nishal Shetty noted a significant influx of traders to the WazirX platform after the lifting of the ban of the Reserve Bank of India (RBI) on banking services for cryptocurrency companies.
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