Delay in crypto legislation spurs lobbying

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NEW DELHI: The government’s delay in finalizing cryptocurrency legislation has sparked intense lobbying, with agencies worrying about the risks emanating from an unregulated segment with extreme price volatility posing a threat to investors, many of whom do not understand the instrument. In addition, there are concerns about the instrument used for money laundering and terrorist financing, an issue that has been reported by other agencies around the world, sources told TOI. While the Supreme Court lifted the ban imposed by the RBI, the government listed a cryptocurrency bill to be introduced in the budget session of Parliament, but with the session cut short, the legislation could not make it. to do. During the monsoon session, the government remained silent on the future of the bill, with Finance Minister Nirmala Sitharaman recently saying it was sent for approval by the Union Cabinet before it can be presented to Parliament. The next session is at least two months away. But crypto exchanges have used the interim period to launch a massive lobbying initiative with several governments and regulators, raising concerns. The exchanges have argued that a ban on digital currency transactions will result in job losses. While there are fears that a ban could result in investors being locked into the instrument, sources have indicated that a window of three to six months will be allowed for investors to exit. Several officials have rejected the argument that cryptocurrencies are an asset class. In addition, there are concerns about the legal basis for the presence of certain exchanges, which remain outside the purview of Sebi or the RBI. There needs to be global coordination to tackle the challenge posed by cryptocurrencies. They are not a currency because only the sovereign can issue money. There is a serious danger in authorizing these instruments, a source said.

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