This week, the inter-ministerial committee (IMC) of India officially recommended the imposition of what has been considered a blanket ban on crypto assets like bitcoin.
According to Reuters, the panel led by finance secretary Subhash Chandra Garg has suggested a fine of $3.63 million and imprisonment for both individuals and businesses that engage in any crypto-related activity including mining, investing, transfers, and issuance.
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The official report submitted by the IMC to the finance industry obtained by Inc42 explicitly stated that crypto-assets lack underlying intrinsic value, an argument critics have consistently brought upon to describe the speculative nature of the asset class since the inception of bitcoin in 2009.
The document read:
“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. Since their inceptions, cryptocurrencies have demonstrated extreme fluctuations in their prices. Therefore, the Committee is of clear view that the private cryptocurrencies should not be allowed.”
If the report is accepted by the finance ministry and the ban goes through, executives fear it would effectively put an end to the potent crypto market in India, restricting the ability of companies in dealing with crypto assets.
Already, most leading crypto exchanges in India have closed operations in India and moved to other markets. Since April 2019, local reports indicated that due to regulatory uncertainty, funding for exchanges in India has started to dry up.
Sathvik Vishwanath, CEO of Unocoin, told ET at the time:
“We did ask people to leave last week,