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cryptocurrency | IST

Cryptocurrency can become indirect legal tender if it's permitted as an asset: Former member of PMEAC

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The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is expected to be tabled in the Winter Session of Parliament for consideration and passing. Anantha Nageswaran, Former Member of PMEAC said, if cryptocurrency is permitted as an asset it can be exchanged into an indirect legal tender.

The government's brief description of the cryptocurrencies bill in the parliamentary bulletin for the winter session has worried the nascent crypto trading community because it speaks about prohibiting all private cryptocurrencies but allowing for some exceptions.
In an interview with CNBC-TV18, Anantha Nageswaran, a former member of PMEAC said, if cryptocurrency is permitted as an asset it can be exchanged into an indirect legal tender.
"If you consider cryptocurrency as an asset, then you can exchange it for cash and to that extent, it becomes an indirect legal tender. So if it is permitted as an asset it can be exchanged into a legal tender," Nageswaran said.
Earlier, union finance secretary TV Somanathan told CNBC-TV18 that cryptocurrency won't be a legal tender by any means.
Pronab Sen, a former chief statistician said by banning cryptocurrencies you are shifting the trading to an offshore location, "I find it very difficult to imagine how to trade in cryptocurrencies can be stopped. You can ban the exchanges in India but the crypto world is such that all you are doing is shifting the trading to an offshore location. If you really want to be effective in terms of prohibiting cryptocurrencies then you have to work on the foreign exchange market. But what that may end up doing is taking fairly regressive steps in terms of our foreign exchange laws."
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Sathvik Vishwanath, co-founder and CEO of Unocoin said transactions on Bitcoin or any other blockchains happen on the internet and so trying to ban it is a futile effort.
"Transactions on Bitcoin or any other blockchains happen on the internet. So as long as someone has access to the internet, it is technically impossible for anyone to stop them. So trying to ban it is a very futile effort."
Sumit Gupta, co-founder and CEO of CoinDCX said all crypto exchanges in India have proper KYC standards in place and regulation is the right way forward.
"All the crypto exchanges in India have proper KYC standards in place which are similar to what other financial intuitions follow. So every exchange has these processes set already and for any user that buys and sells from these exchanges, we have their proper data and the data can be very well shared with authorities if they want to see if people have paid taxes on that," Gupta said.
"Regulations will also allow these exchanges to have standardised guidelines and that will also help the government to understand who has bought what value, are they paying taxes on it and if someone is not doing the right activity they can be curbed down. So regulation will stop all the bad actors from being a part of the ecosystem and only allow innovation to happen. So I believe regulation is the right way forward," he added.
Watch the video for the entire conversation.