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Attention Readers, The Indian Ministry of Finance announced that the Steering Committee, on Fintech-Related Issues, has submitted its final report to the finance minister on Monday 2, 2019. The committee was constituted by the DEA under the chairmanship of Subhash Chandra Garg.

In its official report, the committee has announced that the “Use of digital tokens resolves the issue of multiple currencies, improves the liquidity and capital compliance costs, allows for micro-payments and expedites the payment process, which further eliminates liquidity risks,”.

The Garg said in his statement that the “main aim of this committee was to take stock of developments in the fintech space globally and India also, study the regulatory climate in various geographies, identify application areas and use cases in governance and financial services, and apart from this it has to suggest institutional regulatory upgrades enabling fintech innovations,”.

About Committee That Drafted Crypto Bill

Another committee which was also constituted by the DEA under the chairmanship of Subhash Chandra Garg was the interministerial committee (IMC). The aim of this committee was to study all the aspects of cryptocurrencies and providing their recommendations. In Nov 2017, the IMC met three times before submitting its report titled “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019” to the finance minister. The report and bill were both submitted on Feb. 28, but were announced to the public on July 22.

Both the committees were headed by Subhash Chandra Garg.

Apart from Subhash Chandra Garg, the IMC report was also signed by the secretary of the Ministry of Electronics and Information Technology, the chairman of the Securities and Exchange Board of India, and the deputy governor of the Reserve Bank of India (RBI).

Besides this, a total number of 31 industry participants are also listed in the report including the Nasscom, IAMAI, Paypal, Mastercard, Facebook, and several banks such as RBL Bank, State Bank of India, and Yes Bank.

Since the announcement, the Indian crypto community has started campaigning to convince the government that the reports are flawed. The Nasscom and IAMAI have also raised their concerns regarding the bill to ban cryptocurrencies. They believe that banning is not the solution.

Regulation of Cryptocurrencies

The report issued by the committee is suggesting that the tokens can be grouped into two categories depending on the objective of their issue.

The first category of tokens are utility tokens, which “entitle future access to a company’s product or service,”.

The second category of tokens are security tokens.

The regulation of tokens completely depends on the characteristics and the purpose for which they are being issued.