Parliamentary Committee Meets Crypto Industry Players, Need For Regulatory Mechanism Emphasised

Notably, this is the first meeting on the subject to be convened by the Parliamentary Standing Committee on Finance.

New Delhi: Representatives of crypto exchanges, Blockchain and Crypto Assets Council (BACC), industry bodies, and other stakeholders on Monday made their submissions on crypto finance on Monday before a parliamentary panel chaired by BJP leader Jayant Sinha.

At the meeting of the Parliamentary Standing Committee on Finance with industry associations and experts on the matter of crypto finance today, there was an understanding that cryptocurrency can not be stopped but it must be regulated, news agency ANI reported sources as saying.

“There was a consensus that a regulatory mechanism should be put in place to regulate cryptocurrency. Industry associations and stakeholders were not clear as to who should be the regulator,” sources told ANI.

They said that the security of investors’ money was the most serious concern expressed by MPs at the meeting. 

As per the agency’s sources, an MP expressed concern over full-page crypto ads in national dailies. Experts said that cryptocurrencies are some sort of investors’ democracy

Members of the Parliamentary Standing Committee on Finance now want Government officials to appear before it on the matter of crypto finance and address their concerns, they added.

Notably, this is the first meeting on the subject to be convened by the Parliamentary Standing Committee on Finance.

Crypto has generated a lot of interest as well as concerns in various quarters around investment potential and risks.

The Parliamentary Standing Committee meeting comes days after Prime Minister Narendra Modi chaired a high-level meeting with officials from various ministries and RBI on the issue of cryptocurrency.

Earlier, talking about the meeting, panel chairman Jayant Sinha had said the meeting on crypto finance will discuss the opportunities and challenges this fast evolving industry presents to the regulators and policymakers.

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, the former Minister of State for Finance told news agency PTI.

We will hear from them about their views on the right regulatory framework for this industry as it continues to develop and evolve, he added.

In early March 2020, the Supreme Court had nullified the RBI circular banning cryptocurrencies. 

On March 4, 2021, the Supreme Court had set aside an RBI circular of April 6, 2018, prohibiting banks and entities regulated by it from providing services in relation to virtual currencies.

Following this on February 5, 2021, the central bank had instituted an internal panel to suggest a model for the central bank's digital currency.

The RBI had announced its intent to come out with an official digital currency, in the face of proliferation of cryptocurrencies like Bitcoin about which the central bank has had many concerns.

Regulators and governments have been sceptical about cryptocurrencies and are apprehensive about the associated risks.

(With Inputs From Agencies)