on the crypto
News published by the Indian division of Bloomberg has raised considerable hype in the world of cryptocurrencies. The New Delhi government has in fact presented a draft law recommended by a working group led by the Undersecretary for Economic Affairs, Subhash Chandra Garg, and composed of members of the Central Bank, the Securities and Exchange Commission of India, the Central Direct Taxation Authority and the investigative agency, with rather disturbing outlines. With its approval, in fact, the Eastern country would be practically the first in the world to criminalize the extraction, possession or sale of Bitcoin and other virtual currencies.
Indian Cryptographic Act: what does it say?
The project in question is theIndian Cryptographic Act and proposes a series of sanctions for all those who directly or indirectly participate in the extraction or generation of cryptocurrency, hold a quantity, sell them, transfer them, alienate them, issue them or market them cryptocurrencies. Crimes that are considered certainly not minor, considering that prison sentences can reach up to 10 years in prison.
Another point of the provision then states that if the violation of the law was carried out by a legal person, the director, the member of the management committee, the chief executive officer, the executive and other senior managers will be held responsible for the act. .
In the event that the Indian Crypthografic Act is approved, Indian citizens will have theobligation to declare their digital assets within 90 days and dispose of them in accordance with the instructions of the central government. Otherwise they would face significant legal problems.
A real contradiction
The news spread by Bloomberg had already been anticipated in May by The Economic Times and therefore did not raise excessive surprise in the circles concerned. However, there remains the clear feeling of an act in open contradiction with the intentions made public in the recent past, namely the forthcoming adoption of a cryptocurrency managed by the country's authorities.
If it is true, in fact, that The Hindu Business Line at the beginning of the year he had affirmed the change of direction within the Indian government, citing an internal source according to which the idea of a crypto-rupee had been abandoned as it was considered premature, and that the Central Bank of India had previously imposed a banking blockade on the exchange of cryptocurrency, no indiscretion has yet transpired to support a change of opinion. Indeed, Bloomberg's own article states that the new bill would take over the development of a new national cryptocurrency, which would be called Digital Rupee.
Some voices opposed to the Digital Rupee
While the Indian government confirms its authoritarian vocation, it should be pointed out that according to some analysts the creation of a Digital Rupee would represent a considerable risk, at this very moment.
Secondo Praveen Kumar, the founder of Belfrics, a cryptocurrency exchange which concentrates its presence in Asia and Africa, the Indian government should have the foresight to leave the experimentation of a digital currency to smaller countries, but also more technologically advanced like Singapore and the United Arab Emirates, and to observe their developments before tackling the launch in a crypto-rupee.
Kunal Nadwani, CEO of uTrade Solutions and expert on Blockchain, had in turn affirmed the fears related to the fact that the economic effects of cryptography are considerable and largely unknown, so a cautious approach to the topic would be preferred by monetary and political institutions. Maybe by postponing the project of an encrypted currency controlled by the State.
In view of their opinions, however, it is necessary to consider the opinion expressed by the central bank of the country in a report a few months ago, in which the RBI had indicated how the main function of a CBDC would have been to facilitate payments within national borders. Furthermore, a digital asset of this kind could prove extremely useful in order to to put a stop to the growing costs of managing physical money and to get more power on the subject of fight against recycling activities of capital deriving from illegal activities.
Finally it should be remembered as already during the course of the 2018, had been launched a white paper by the research group of the RBI, the Institute for Development & Research in Banking Technology, in which the Blockchain was indicated as a sufficiently mature technology and therefore able to efficiently support a central bank digital currency. At the time, the hypothesis was also advanced that this virtual currency it would have been dedicated to the Hindu goddess of wealth and prosperity, Lakshmi.
Precisely in the light of these premises, however, the Indian Crypthografic Act takes the form of an absolutely abnormal provision and the first consequence of which will be to cast new shadows on the degree of democracy allowed within the great Asian country.
