The Indian government plans to regulate cryptocurrency exchanges to keep track of transactions conducted there, S.C. Garg, Economic Affairs Secretary has said, Reuters reported.
“The government will take steps to make it illegal as a payment system,” he said at a post-budget event, adding the trading of “crypto assets” at the unregulated exchanges would be regulated.
According to Mr. Garg, by the end of the current financial year – March 31st – a panel set by the government will come up with proper regulatory rules on cryptocurrencies and exchanges.
“We hope that within this year, the committee would finalize its recommendations and then it would require legal changes, regulatory assignments, but certainly there will be regulations by the end of this financial year,” said Mr. Garg.
In the budget speech, the Finance Minister raised concerns about the use of cryptocurrency in illicit activities like money laundering and even terror financing.Reaffirming the government’s stance, Mr. Garg said:
“The exchanges which have been set up currently are not regulated exchanges. They are in a way self-set up, self-regulated. There are no legal or statutory requirements for conducting the KYC (know your customer), there are no records of the transactions.”
Finance Minister Arun Jaitley told parliament while presenting his annual budget last week that “the government does not consider cryptocurrencies legal tender and will take all measures to eliminate use of crypto assets in financing illegitimate activities or as part of payment system.”
The Indian government has issued repeated warnings against digital currency investments, saying these were like “Ponzi schemes” that offer unusually high returns to early investors.