The business of policing the ever-changing virtual currency market – now comprised of over 1,500 varieties of coin – and monitoring private and anonymous transactions is so fraught with complications that India would be better off prohibiting them altogether, ex-Economic Affairs Secretary Shaktikanta Das has said.
“Let us accept that it would not be possible to regulate it effectively. Because they will do transactions from their houses,” he said in an interview with Quartz.
“You cannot enter every home to check what transactions are going on. So, I think this is a serious challenge, and should not be allowed at all.”
The Reserve Bank of India, the country’s central bank, has long opposed cryptocurrencies, saying as early as 2013 that it considered them a security risk and advising citizens against investing in decentralised currencies without an asset base, reservations shared by fellow Asian superpowers China and South Korea.
Das himself served on one investigative committee that expressed clear opposition to bitcoin and its kind – another is currently in conference reviewing the situation.
“This is a parallel currency system developing and it is not legal. There is no legal provision which backs up these transactions,” Das said.
“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.
“It’s a serious challenge and threat to global financial stability,” he added.
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Finance Minister Arun Jaitely simiarly used his budget speech last month to warn that Narendra Modi’s government “does not recognise cryptocurrencies as legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payments system.”
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