The government should regulate crypto currencies as an asset or commodity and not a currency. This was a proposal put forth by Subhash Garg, the former Finance and Economic Affairs Secretary and Head of the Inter-Ministerial Committee on Virtual Currencies.
In a webinar organised by the CREBACO in association with law firm Khaitan & Co, Garg said even the draft bill proposing to ban crypto currencies such as Bitcoin and others doesn’t talk about using crypto as an asset or as a commodity and hence, with required regulations, the government should permit crypto assets. Garg said, “while I stick to what we said in the report on the Virtual Currencies committee, the crypto asset is anybody’s right to create. The value lies in the eyes of the holder.”
This observation of Garg is seen as a very positive sign by the crypto industry because he had proposed a ban on it as a currency, while he was heading a government committee on Virtual Currencies. Now the same person is saying there is scope to allow its use as an asset with regulations. Garg added, “It is the Government’s duty to protect the gullible — people who don’t understand need to be protected.”
About the central bank-supported currency, he favoured demat (dematerialisation) of government currency like all securities, including government securities issued in demat form and even sovereign gold bonds.
It may be noted that in March this year, the Supreme Court rescinded the RBI diktat to banks, baring them from dealing with exchanges providing trading facilities for crypto or virtual currencies. The Supreme Court ruling has paved way for trading in these currencies again. Interestingly the bill seeking a ban on crypto currencies was introduced before the SC judgement. Now banks are opening accounts of virtual currency platforms.
In the panel discussion on the subject, Garg, whose views converge with those of the Government view, and who perhaps moulded the government thoughts on the issue during his tenure as Secretary, Department of Companies Affairs, was categorical on saying that crypto currencies should not be allowed as currency in any way. He was, however, a big supporter of distributed ledger technology like blockchain and supported its use in financial markets.
Sidharth Sogani, Founder and CEO, CREBACO (Credit Rating for Exchanges, Blockchains and Coin Offerings), said, “Don’t be scared of Crypto and ban it, help it grow instead. When there is something so new, the knowledge is derived by practical experience, not by a set of books. A lot has to be done.”
Nischal Shetty, Founder, WazirX, a platform facilitating crypto trading said, “After lockdown, the number of people wanting to know about and understand crypto currencies has increased four times, which shows how people are still very much interested in virtual currencies.”
Sanjay Khan Nagra, Partner, Khaitan & Co,…