Cryptocurrency panel for ban on private digital currencies, jail time of up to 10 years

  1. Government had constituted a panel to examine all issues related to cryptocurrencies.The panel has drafted a law,‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’.
  2. The panel has said that anybody who mine, hold, transact or deal with cryptocurrencies in any form whether directly or indirectly through an exchange or trading should attract a jail term of one to 10 years.
  3. The panel also proposes a monetary penalty of up to three times the loss caused to the exchequer or gains made by the cryptocurrency user whichever is higher.
  4. The panel has also recommended that private cryptocurrencies should be banned completely in India.
  5. However,the panel has said that the government should keep an open mind on the potential issuance of cryptocurrencies by the Reserve Bank of India.
  6. Further,the panel has also highlighted the benefits of the underlying technology—the distributed ledger technology(DLT) and blockchain.
  7. The panel recommended that the RBI can examine the utility of using DLT based systems for enabling faster and more secure payment infrastructure especially for cross-border payments.
  8. The panel has also recommended that various state governments may examine the feasibility of using DLT for land-records management. This can be beneficial for removing errors and frauds in land markets.
  9. Crypto currency is a digital currency.It allows transacting parties to remain anonymous while confirming that the transaction is valid one.It is not owned or controlled by any institution including both government institutions and private institutions.Various cryptocurrencies used globally are Bitcoin,Ethereum and Ripple.
  10. Blockchain is a distributed ledger technology that stores information across multiple systems securely and such data stored and distributed cannot be copied, hacked or tampered with but records can only be added.