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Cryptocurrency ban bill: Finance Ministry wants to ban cryptocurrency, encourage blockchain

The Finance Ministry has proposed a legislation that bans the use of cryptocurrency in India, and makes violations punishable with a fine or with one to ten years of imprisonment. Called the "Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019" (see below), the bill states that "cryptocurrency shall not be used as legal tender or currency at any place in India". It also makes promotion, advertising, Andy abetment in participation of use of cryptocurrency punishable with a fine, or prison term of upto 7 years. It makes a repeat offence punishable with a prison sentence of 5-10 years along with a fine. The bill was drafted by an inter-ministerial committee chaired by Subhash Chandra Garg, secretary of the Department of Economic Affairs under the Finance Ministry. Created on November 2nd, 2017, the committee's other members were MeitY Secretary Ajay Prakash Sawhney, SEBI Chairman Ajay Tyagi, and RBI Deputy Governor BP Kanungo. While banning cryptocurrencies, the committee said it would be "advisable" to have an "open mind" about introducing an official digital currency in India, and a group with DEA, RBI, MeitY, and DFS should examine the development of an appropriate model of digital currency, which would be regulated by the RBI, if it comes at all. The committee met thrice: November 27, 2017, February 22, 2018, and most recently on January 9, 2019. The meetings saw representation from MeitY, Ministry of Corporate Affairs, and CBDT. Here's the committee’s rationale for banning cryptocurrencies: 1. They're not money at…

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