India’s government has been criticizing cryptocurrencies for a while now, yet not banning them. Now a former top finance ministry official says that bitcoin won’t be prohibited in the Asian country.
Shaktikanta Das is a former secretary of economic affairs who also headed the government’s first panel set up last year to understand and recommend regulations, believes regulating them would be a very hard.
“Let us accept that it would not be possible to regulate it effectively. Because they will do transactions from their houses. You cannot enter every home to check what transactions are going on. So, I think this is a serious challenge, and this should not be allowed at all,” Das stated.
In the last few years, two committees in the finance ministry have tried to understand and recommend regulations for cryptocurrencies. Das’s opinion is important because he has held several key positions in the finance ministry, heading the departments of revenue and economic affairs.
The issue with cryptocurrencies, according to Das, is that there is no asset base. “Currencies have the guarantee of the RBI, on behalf of the sovereign. That is the underlying guarantee for that. Share of a company—you have an underlying asset of the company. In cryptocurrencies, what is the asset base? It is created out of vacuum, it is created out of thin air,” he said during an interview a couple days ago.
“There is the danger of cryptocurrencies leading to money laundering, terror financing, and unaccounted transactions. It will pose a serious threat to the financial stability not only of India, and in fact more, in the case of the developed world,” he added.
In the meantime, some Asian countries, such as China and South Korea, share India’s apprehensions. In 2017, the Chinese government shut down the country’s bitcoin trading exchanges. Earlier this year, South Korea indicated it will ban such exchanges. Japan, in contrast, passed a law in March 2017 allowing e-currency payments and declaring them assets.
