The Inter-Ministerial Committee (IMC), established to study and develop rules for the cryptocurrency industry in India, released a report in which it recommended the government to ban virtual currencies in the country. The document was unveiled on July 22.
The committee recommends that all private cryptocurrencies, except any cryptocurrency which may be issued by the government, be banned in India,” - said the report.
The task force has also considered the measures that should be taken against individuals and companies that would violate the regulation. In particular, the illegal activities will include mining, generation, holding, trading, issuing or exchange of the cryptocurrencies. All these actions will be subject to a fine of INR 250 million ($3.6 million) and up to 10 years in prison.
The government is going to study the recommendations provided by IMC in the near term. For now, the authorities are considering the bill that prohibits the use of digital money.
For reference, the Reserve Bank of India imposed a crypto ban under which banking organizations are unable to provide service to any cryptocurrency-related organization. As a result, local cryptocurrency exchanges began to close actively, and three trading platforms have stopped working since the start of the year.
Although the IMC called for a ban on digital assets, it also advised the government not to abandon the idea of creating a national cryptocurrency. In addition, the committee proposed a creation of a permanent cryptocurrency authority to monitor new trends in the industry.
In addition to the report, the committee also introduced a bill that government officials and financial regulators are likely to use as a basis for developing cryptocurrency rules that may include a general ban on digital assets.