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Indian government opposed to crypto but receptive to blockchain technologies

The government said on Tuesday that it would take all necessary steps to prevent the utility of crypto-assets. They think crypto supports illegal activities or is part of the payment system.

Govt To Aggressively Investigate Blackchain

Minister of State for Finance Pankaj Chaudhary states in a written reply to Rajya Sabha that the government will aggressively investigate the use of blockchain technology to usher in the digital economy.

“The government does not consider cryptocurrencies to be legal money or coins, and it will take all necessary steps to prevent their use in financing illegal operations or as part of the payment system.”

Private Cryptos Banned

In its report, a High-Level Inter-Ministerial Committee (IMC), which the Secretary chairs, to study virtual currencies’ issues and propose taking specific actions in this area, recommends prohibiting all private cryptocurrencies in India. However, except for any cryptocurrency issued by the government.

The government would judge the IMC’s recommendations and any legislative proposals if any. Therefore, it would be submitted in Parliament through the proper channels, according to the minister.

Recovering Money from Defaulters

In a separate response, Minister of State for Finance Bhagwat Karad stated that public sector banks (PSBs) had recovered 4,52,480 crore from defaulters in NPA and written-off accounts over the last five financial years. Additionally, they have recovered a total of 20,334 crores from wilful defaulters until March 31, 2021.

He went on to say that the RBI has had data on willful defaulters since 2019. According to data provided by banks to CRILC, the total number of individual wilful defaulters increased to 248 in 2019-20. Moreover, they then fell to 156 in 2020-21.

Karad also states that gross NPAs reported to CRILC amounted to 66.8% of overall gross NPAs.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.