A panel of legislators in India prepared a report about cryptocurrency use in the country and is recommending a ban on all “cryptocurrencies created by non-sovereigns,” according to a report.
“The Committee notes with serious concern mushrooming of cryptocurrencies almost invariably issued abroad and numerous people in India investing in these cryptocurrencies. All these cryptocurrencies have been created by non-sovereigns and are in this sense entirely private enterprises,” the report said.
The punishment for using digital currency would be heavy fines and possible jail time of up to 10 years.
“There is no underlying intrinsic value of these private cryptocurrencies. These private cryptocurrencies lack all the attributes of a currency. There is no fixed nominal value of these private cryptocurrencies, i.e. neither act as any store of value nor they are a medium of exchange,” the committee said.
The committee said cryptocurrencies can’t serve the purpose of a currency in the country. “The private cryptocurrencies are inconsistent with the essential functions of money/currency, hence private cryptocurrencies cannot replace fiat currencies,” the report said.
The committee did, however, say that blockchain technology was “an important and innovative technology, which will play a major role in ushering in the digital age.”
Last year, the country put a virtual ban on cryptocurrency when the Reserve Bank of India sent a notice to all Indian banks asking them to no longer deal with businesses that use digital coins. Person-to-person crypto trading is still legal in the country, though.
India has had a number of crypto-related scams. Last week, three people were kidnapped and held for ransom for 80 bitcoin. Two of them were cryptocurrency traders. India’s potential new stance on cryptocurrency follows the country’s swift rejection of Facebook’s proposed cryptocurrency Libra.
“Design of the Facebook currency has not been fully explained,” India’s Economic Affairs Secretary Subhash Garg told Bloomberg. “But whatever it is, it would be a private cryptocurrency and that’s not something we have been comfortable with.”
The government will review the report and drafted legislation and then make a final decision.