All Private Cryptocurrency Will Be Regulated, Not Banned: A Cabinet note circulated by the government on the proposed cryptocurrency bill has suggested regulation of private cryptocurrency rather than banning it. The note also says that crypto will not be recognised as legal currency in India. Further, the legislation describes Cryptocurrency as Cryptoasset, according to the note.
Cryptoassets will be dealt with the existing crypto exchange platforms which will be regulated by Securities and Exchange Board of India (SEBI). A cut-off date will be prescribed for those having cryptoassets to declare the same and bring under the crypto exchange platforms – which will be regulated by the market regulator.
The proposed virtual currency by the Reserve Bank of India (RBI) has not been clubbed with the new crypto bill. However, the central bank will regulate issues related to cryptocurrency.
All those found violating the exchange provisions will be penalised with criminal imprisonment of upto one and a half years. Penalties in the range of ₹ 5 crore to ₹ 20 crore may also be levied by the regulator.
As a deterrent for those found using these assets for terror related activities, the provisions of the Prevention of Money Laundering Act (PMLA) will apply with suitable amendments.