A nationalist organization in India has passed a resolution calling on the government to ban digital currencies in the Asian country. The Swadeshi Jagran Manch (SJM) believes that digital currencies pose a danger to the financial markets and are a hotbed of illicit activities, including money laundering. However, any legislation will take a few more months than expected, with insiders revealing that parliament is putting off digital currency regulations to focus on more urgent matters.
The SJM is an economic and cultural organization founded in 1991. It’s affiliated with the Rashtriya Swayamsevak Sangh, an Indian right-wing, nationalist paramilitary organization with a massive influence on India’s government. With a focus on the Indian economy, the SJM takes a nationalist stance on most issues as it seeks to protect local firms. It has lobbied against Chinese tech firms such as TikTok and Huawei, called for data localization, pressed for stricter rules for e-commerce giants, and more.
Digital currencies have joined a long list of activities the SJM is against. The organization recently passed a resolution demanding the Narendra Modi government to ban buying, selling, investing, or storing digital currencies in India.
In a resolution that it passed during a recent meeting, the organization stated, “The government should out rightly ban buying, selling, investing and otherwise dealing in cryptocurrencies by any person resident in India.”
Those that violate this law must face financial penalties or jail sentences, or both, the SJM proposed.
Also, according to the SJM, digital currencies experience a lot of speculation and price volatility. If allowed to integrate into the financial market, the effect could be massive, it said. If they were to be legalized, they would also promote illegal activities such as money laundering and terrorist financing, it added.
“The law relating to issuance of digital currency by the Reserve Bank of India should be framed quickly. The CBDC should be considered as legal tender. Cryptocurrencies such as Bitcoin, Ethereum, etc should not be recognised as asset or digital asset because it will indirectly become medium of exchange like currency,” the resolution summed up.
Digital currency bill to be delayed even further
As the SJM calls for parliament to move quickly and regulate digital currencies, sources have revealed that a bill seeking to do just that will be delayed even further in the new year. India’s legislators will resume activities in January, but the focus will be on other more pressing issues.
Known as “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021,” it was included in the roaster of legislation to be debated in the Lok Sabha (the lower house of parliament) this year. As CoinGeek reported, the Lok Sabha was supposed to discuss the bill during the winter session, which ended just before Christmas, but it didn’t. Now, according to sources in India, the bill might be delayed even further.
The next parliamentary session is set to begin by the end of January. Known as the Budget Session, its main focus is the country’s budget and all resources and time go towards the same. The Ministry of Finance, which would have played a key role in shaping the digital currency regulations, is fully focused on the budget as well.
“During the Budget Session, the finance ministry gives every single senior official a sectoral responsibility, and as a result nobody is performing their normal functions,” Vivan Sharan, a policy expert in India who has worked with the government before, explained.
Subhash Garg, a former official at the Finance Ministry, believes that the budget debates will extend to the end of April and possibly beyond.
“One cannot speculate about whether the bill will come in the monsoon session in July. There are much deeper issues. I don’t know if the government is expanding the scope of the bill. I could take even longer and perhaps, should take longer,” he told one outlet.
The delay could be a godsend for the digital currency industry. In its current form, the bill is very restrictive of the industry and even has sections that call for a ban on “private cryptocurrencies.” However, now that it’s delayed, the industry could take this time to engage with regulators more and hopefully get more enabling regulations.
The Indian government has indicated that it’s willing to adopt a friendlier approach to the industry. Prime Minister Modi has called for India to lead global efforts to shape “emerging technologies, like social media and cryptocurrencies, so that they are used to empower democracy, not to undermine it.”
As CoinGeek reported, he called for a progressive and forward-looking approach to regulating digital currencies.
Cryptocurrency scams still abound in India
As Indians await regulations, a police commissioner has called on citizens to be wary of digital currency scams. Shikha Goel, the additional commissioner of police in Hyderabad India, warned citizens about the rise in cybercrime, facilitated by digital currencies.
Goel revealed that most scams revolve around ‘get-rich-quick’ schemes that lure investors with fake promises. As soon as they are hooked, the scammers take off with their money.
“They will send a link to a website or app to the victims and explain them how to purchase cryptocurrency. After a successful purchase, the fraudsters ask them to transfer it to their private wallet for much higher returns,” Goel stated.
So far, the Hyderabad police have seen 16 cases filed related to digital currency scams. Of these, 14 were related to investment and trading.
“People have been cheated of ₹ 3.45 crore ($460,000) in their greed for higher returns against investment in cryptocurrency,” the commissioner revealed.
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