Even as cryptocurrency investors and entrepreneurs await regulations about cryptocurrencies amid bitcoin boom, the government on Monday reiterated that it would take a selection on the suggestions of the Inter-Ministerial Committee — constituted in November 2017 to study concerns about cryptos — and the legislative proposal, if any, would be introduced in the Parliament following the due course of action. Minister of State for Finance Ministry Pankaj Chaudhary also informed the Lok Sabha that “the government does not collect data on environmental impact due to mining of cryptocurrency.” Crypto investments in India grew from $923 million in April 2020 to $6.6 billion in May 2021 – a 615 per cent jump, according to a current study by blockchain information platform Chainalysis.
The MoS was responding to questions whether the government is conscious of the huge environmental effect mining cryptocurrency has and if so, the specifics of the methods if taken to combat this situation and lower cryptocurrency’s effect on the atmosphere.
“Cryptos are certainly mined in India. However, this mining consumes significant energy – and its economic impact should be analyzed and understood by the government. One way to regulate this is to tax the mining itself – which, for example, the Singapore Cryptocurrency Regulations do. The other is to tax the transfer or trade, or both. Not doing it is imposing a public cost on an activity that generates private profit – a position that stokes at the heart of our system of taxation,” Mathew Chacko, Partner at law firm Spice Route Legal told TheSpuzz Online.
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Last month, Finance Minister Nirmala Sitharaman had also informed Parliament that the government does not gather details about the quantity of cryptocurrency exchanges operational in the nation and the quantity of investors linked to the similar. Also, no details had come to the notice of the government about whether or not narcotic drug trafficking and funds laundering are getting committed by means of a lot of of the cryptocurrency exchanges, the minister had stated.
Earlier this year in May, the Reserve Bank of India (RBI) in a circular on ‘customer due diligence for transactions in virtual currencies’ had advised banks and other regulated entities to conduct client due diligence processes in line with regulations governing Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities beneath Prevention of Money Laundering Act, (PMLA), 2002 in addition to guaranteeing compliance with relevant provisions beneath Foreign Exchange Management Act (FEMA) for overseas remittances.
In May 2021, amid media reports of particular banks citing the 2018 crypto ban by RBI to caution their shoppers against dealing in virtual currencies, the central bank had told banks that they can’t refer to the old order that was quashed by the Supreme Court last year. In April 2018, the RBI had stopped regulated entities to deal in virtual currencies or provide services for facilitating any particular person or entity in dealing with or settling such currencies which includes preserving accounts, registering, trading, settling, clearing, providing loans against virtual tokens, and so on.
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