RBI seeks regulations on cryptocurrencies: Sitharaman in LS

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“Considering the concern expressed by RBI regarding the effects of cryptocurrency destabilization on a country’s monetary and fiscal stability, RBI has recommended the framing of laws in this sector. RBI is of the view that cryptocurrency must be prohibited,” said The Finance. minister.

The minister in the low assembly said that cryptocurrency according to the definition without limits and requires international collaboration to prevent regulatory arbitration. “Therefore, every law for regulations or for prohibition can be effective only after a significant international collaboration regarding the evaluation of risk and benefits and evolution of taxonomy and general standards,” he said.

When answering the question, whether the RBI has issued instructions, circulars, directions, warnings, etc., regarding limiting publishing, purchasing, selling, holding and circulating cryptocurrency in India for the past ten years, said Sitharaman, “RBI has occurred to remind users, holders and Virtual Currency Traders (VCS) Vide Public Notification on December 24, 2013, February 1, 2017 and December 5, 2017 that dealing with VC is associated with economic, financial, operational, law, customer protection and related risk. RBI has also issued a letter Circular on April 6, 2018 which prohibits entities that are regulated to handle virtual currencies (VC) or provide services to facilitate anyone or entity in handling or completing VC. “

He added that RBI, with his circular dated May 31, 2021, has also suggested that the entity set to continue to carry out the complete testing process of customers for transactions in VC, in line with regulations governing standards to find out your customers (KYC), Anti-Money Washing (AML ), Fighting Terrorism Financing (CFT), Obligations under the Prevention of Money Laundering Money (PMLA), 2002, etc., In addition to ensuring compliance with relevant provisions based on Foreign Exchange Management Law (FEMA) for sending money abroad.

“RBI states that cryptocurrency is not a currency because every modern currency needs to be issued by the central bank / government. Furthermore, the value of the Fiat currency is moored by their monetary policy and status as a legal tender, but the value of cryptocurrency only lies only lies only lies only lies only lies only Located only lies there is only a cryptocurrency located, there is only cryptocurrency that is only based on speculation and expectations of high returns that are not anchored properly, so that they will have a de-stabilization effect on the monetary and fiscal stability of a country, “he added.