Money & Banking

Crypto transactions should be recognised as asset class, regulated centrally: RSS body

PTI | | | Updated on: Nov 20, 2021
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This will help the government unearth illicit transactions

The RSS-affiliated Swadeshi Jagaran Manch has said that the government should bring a law to recognise cryptocurrency transactions as an “asset class” and regulate it.

Domestic servers

Swadeshi Jagaran Manch (SJM) co-convenor Ashwani Mahajan suggested that the government should also ensure that the data and hardware used in mining, processing, and transacting of the cryptocurrencies stay at domestic servers.

It will help the government unearth illicit transactions and take action against them, he added.

Also see: Barcelona, Manchester City drop club crypto sponsors amid concerns

“At present, anybody from anywhere in the world can invest in it through private exchanges run by private entities. And the worst is, cryptocurrencies are not controlled by any central authority,” he said when asked for his views on cryptocurrencies.

Encrypted transactions

There is no mechanism in place to see how the encrypted transactions are being made through private exchanges, who are the ones investing in it and what the investors are doing with them, he added.

“Legislation is needed to regulate cryptocurrencies and to recognise transactions done with it as asset class. This will help develop a better understanding of the transactions for purposes of taxation and national security,” Mahajan said.

‘No intrinsic value’

He rejected the comparison of crypto assets with commodities like gold, calling it “unfounded”, saying cryptos have no “intrinsic value”.

Private virtual currencies are at “substantial odds” with the concept of money, he said, emphasising that “no sovereign” should allow private agencies to issue legal tenders or anything equivalent to it.

Also see: Democracies need to work together for safe cryptocurrency operations: PM

“Most of the bitcoins are mined in the dark web and we don’t know who is the issuer. The monies do not represent any person’s debt or liabilities. This crypto is not money. Certainly, it cannot be a currency,” he said.

Globally, there are instances where bitcoins were used on the dark web to pay for guns, drugs and other illicit purposes, he added.

Need for larger discussions

Amid concerns over cryptocurrency, Prime Minister Narendra Modi had chaired a meeting on November 13 to deliberate on the way forward.

On November 15, a parliamentary panel, chaired by BJP leader Jayant Sinha, also discussed the pros and cons of crypto-finance with various stakeholders.

Mahajan appreciated the move but said there is a need to hold “a larger discussion” on the issue, involving all stakeholders.

“The government is talking to some key stakeholders, yet a larger discussion is needed. There is a need for a national debate and larger discussion on the subject of cryptocurrencies,” he said.

Stratospheric rise

Originally started with Bitcoin in 2008, there are currently hundreds of cryptocurrencies being traded on private exchanges internationally, including India.

Also see: All that is dubious about crypto currencies

Due to its stratospheric rise, Bitcoin is considered the best investment of the last decade. Originally priced at around 10 cent, the coin was being traded at over $60,000 till last week.

Solana and Ethereum are two other leading coins in the market with multiple use cases.

Published on November 21, 2021

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