An Indian government panel is suggesting the banning all private cryptocurrencies in the country, in turn for a government-backed digital currency, according to a report by Reuters.
The panel came up with reports and drafted legislation to ban private cryptocurrencies, adding that violators will face a ten-year jail term with hefty fines. They believe this could signal the end of digital currencies of them in India.
Headed by the finance secretary, Subhash Chandra Garg, the government panel recommended a fine of up to 250 million rupees ($3.63 million) for mining, generating, holding, selling, and transfers of cryptocurrency.
In the report submitted to the government, the panel noted that “There is no underlying intrinsic value of these private cryptocurrencies.”
It is no more news that the Indian government issued severe warnings to the citizens against investing in digital currencies. According to the government, cryptocurrencies are like “Ponzi schemes,” which offer unusually high returns to early investors.
The panel went further to propose to the government to consider the creating of an official government-backed digital currency through the Reserve Bank of India (RBI) to function like banknotes in the country.
According to the report, the proposal, however, will be examined by the Indian government, including the regulators before a final decision is made.
Many industry officials expressed total dismay with the development and hoped the government would not approve an outright ban of digital currencies in India.
“If the government decides to take such a drastic step, then India will stand to lose out significantly on the technology front,” said the co-founder, Unocoin, an Indian virtual currency, Sathvik Vishwanath.
According to the CEO of WazirX exchange, Nischal Shetty, banning the digital currencies in India is a regressive step. No country or government should ban new technology such as cryptocurrencies.
As India still battle with the concepts of virtual currencies, the social media giant, Facebook revealed it would not provide its digital currency services in India, due to its regulatory war against cryptocurrency.
The regulatory uncertainty in the country has forced many cryptocurrency exchanges out of business.