The Indian government has responded to three sets of questions regarding cryptocurrency transactions, the high-profile scam in Karnataka and the legality and legality of crypto trading and exchanges in India. The winter session of parliament is now underway and a crypto bill will be considered during it.

Indian Government Answers Questions About Bitcoin Transactions

The Indian Ministry of Finance responded to three sets of questions about cryptocurrency trading and bitcoin in Lok Sabha (the lower house of India’s parliament).

The first set of questions (Starred question No. 12), titled “Bitcoin Transactions,” ask Finance Minister Nirmala Sitharaman “whether the government is aware that bitcoin transaction is silently blooming in India in the recent years.” The finance minister replied:

The government does not collect data on bitcoin transactions.

Finance Minister Sitharaman further inquired “whether the government has any proposals to recognize bitcoin as currency in the country.” She replied “No sir .”

Questions About the Bitcoin Scam in Karnataka

The second set of questions (Unstarred question No. 196) are about the high-profile “Bitcoin Scam in Karnataka,” which recently received heavy media coverage. During his meeting with Prime Minister Narendra Modi, Basavaraj Bommai from Karnataka brought up the case.

The finance minister was questioned about the scam, details of the investigation, and the actions being taken.

Shri Pankaj Chaudhary was the Minister of State in Finance. He said: “Information available in public domain suggests a case of hacker activity involving bitcoin has been examined by the Karnataka Police… However, a case also has been filed by Bangalore Zonal Unit of Directorate of Enforcement. The matter is not of greater public interest .”

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Questions About the Legality of Cryptocurrency Trading and Crypto Exchanges in India

The third set of questions (Unstarred question No. 173), titled “Cryptocurrency,” ask the finance minister “whether the government is aware of the cryptocurrencies that are traded in India.” Minister Chaudhary responded:

Government does not collect information on trading in cryptocurrency.

The finance minister was also asked if cryptocurrency trading in India is allowed and if crypto exchanges in India are legal entities. She was also asked about any Acts that apply to crypto and crypto exchanges.

Minister Chaudhary responded: “Cryptocurrencies in India are not regulated.” RBI [the Reserve Bank of India] 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.”

Winter Sessions of Parliament Begins

The winter session of parliament began Monday. A cryptocurrency bill is listed to be taken up during this session. The bill is not on Monday’s or Tuesday’s agenda.

“The Cryptocurrency and Regulation of Official Digital Currency Bill 2021” seeks “to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” according to the legislative agenda for the winter session of Lok Sabha.

The bill also provides “a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India.” The RBI has previously said that it is working on a digital rupee which it plans to launch in phases.

The Indian government has not made the content of the crypto bill public, which has led to much speculation about whether the government will ban cryptocurrencies, like bitcoin and ether, or provide a regulatory framework for them.

What do you think about the Indian government’s answers? Comment below to let us know your thoughts about the Indian government’s answers.

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