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Indian Government Affirms to Regulate Digital Currencies instead of Banning

Affirming the prior speculations on the concerted efforts of the Indian Parliament and government to regulate the developing world of cryptocurrencies, local news channel NDTV, citing a Cabinet note, has revealed that the proposed cryptocurrency bill has suggested regulation of private cryptocurrency rather than banning it.

The news channel drew five key assertions from the cabinet note that the government itself circulated. One of the focal assertions gleaned from the note is that cryptocurrencies are not in any way recognized as a legal tender in India, a position corroborated by earlier reports. The note also revealed that digital currencies will be regulated by the same body that is regulating cryptocurrency exchanges in the country, the Securities and Exchange Board of India (SEBI).

Against popular opinion, the Reserve Bank of India’s proposed virtual currency has not been linked with the new crypto legislation. However, this does not stop the central banks from regulating issues related to cryptocurrency. The proposed bill will have strict penalties for all those violating the exchange provisions that the penalties may involve a jail term of up to one and a half years. In addition, the regulator may also levy penalties in the range of Rs 5 crore to Rs 20 crore.

The bill will see the modifications of the Prevention of Money Laundering Act (PMLA) to accommodate those who may be using the nascent asset classes for terrorist financing or other related activities. All things being equal, these provisions will be signed into law before the end of the Parliament’s winter session.

The talk of the ban on crypto in India has long been in the pipeline. While the country has not given cryptocurrencies a straight free pass yet, the oversight the RBI is looking to introduce is sure to be welcomed by key industry stakeholders.

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Russian Finance Ministry Believes Crypto Should be Regulated not Banned

The Ministry of Finance in Russia demonstrates its latest stance about the hot issue of the intended blanket ban on crypto-related activities by the nation’s apex bank.

The ministry believes that these plans should be shelved because crypto regulation will fill the void by providing both transparency and protection to citizens.

Ivan Chebeskov, the department director of the Russian Finance Ministry, stated:

“The first thing that should be done is to protect the interests of citizens, consumers of such services, those buying these assets or using the cryptocurrency in certain other process solutions. In this connection, regulation is needed, rather than prohibition.”

The ministry is awaiting the official position of the Russian government after sending a concept for regulation about the crypto market for review.

Chebeskov added:

“The Ministry of Finance is proactively participating in the elaboration of legislative initiatives …we have the prepared regulation concept that we are discussing inside the Finance Ministry, and we have recently sent it to the government office.”

On January 21, the Central Bank of Russia (CBR) went on the offensive through a newly published report entitled “Cryptocurrencies: Trends, Risks, Measures,” and linked cryptocurrencies to Ponzi schemes, thus necessitating their prohibition. Part of the proposal entails cracking the whip on offenders participating in the crypto market.

Nevertheless, Russian tech and political oligarchs are up in arms about these plans. For instance, Telegram founder and CEO Pavel Durov opined that a crypto ban would hinder growth in the emerging world of blockchain technology.

Furthermore, Leonid Volkov, the Chief of Staff to the Russian opposition leader, Alexei Navalny, stated that this was an effort in futility because the blanket ban on crypto assets was like prohibiting person-to-person transfers, which he noted was “Impossible.”

Argentina Halts Crypto Operations Undertaken by Financial Institutions

Days after Argentina’s largest private bank Banco Galicia opened crypto trading services, the nation’s central bank cracked the whip by banning financial institutions from carrying out crypto transactions.

The central bank noted that its decision to stop crypto transactions in the entire financial sector was reached to “mitigate the risks” involved when using digital assets, such as money laundering, cyberattacks, and high volatility.

Financial institutions will only be allowed to finance investment, consumption of goods and services, and production. Argentinians, therefore, will lose opportunities to undertake crypto operations through banks as the blanket ban on unregulated digital assets takes effect.

Recently, Banco Galicia rolled out the new service based on growing demand. It was to enable users to buy, send, and receive Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), and USD Coin (USDC).

To tame runaway inflation, Argentinians have been seeking shelter in crypto.

This can be illustrated by the fact that Argentina is among the world’s top 10 nations with the highest crypto adoption rates. Therefore, the latest development is a big blow.

With annual inflation rates surging by more than 50%, crypto exchange Lemon Cash had stipulated that it would roll out three million Visa crypto cards earlier this year.

Franco Bianchi, the chief marketing officer at Lemon Cash, said:

“Latin America is a good place for these services. Several of the countries have unstable economies and devalued currencies, and the people seek access to cryptocurrencies as a refuge.”

Economists speculate that the inflation rate on Argentinian soil will hit 55% this year from the current 50.7%.

Therefore, the crypto ban will undermine Argentinians because they were using cryptocurrencies as hedges against a cyclical economic crisis that includes a recession, hyperinflation, and repeated currency devaluations.