The decision of the government to bring in virtual digital assets (VDAs) under the ambit of the Prevention of Money Laundering Act (PMLA) may offer an opportunity to the crypto exchanges in the country to show to the Reserve Bank of India that cryptocurrencies may not be seen only as an instrument of money laundering.
Speaking at a Twitter space event, organised by CoinDCX, Aruna Sharma, a development economist and former secretary in the Union ministry of electronics and IT and steel, said that regulations in the sector that are necessary are coming in a piecemeal manner with the government introducing taxation on VDAs earlier.
She said that with the regulations and guidelines in place, exchanges can demonstrate that they are conscious about checking who is boarded and ensuring transactions are taking place are imprinted.
“This is in fact a positive sign to address the apprehension of the RBI that crypto is not a mechanism of money laundering,” said Sharma.
RBI governor Shaktikanta Das has been vocal against allowing cryptocurrencies and has maintained that RBI’s position is that they should be banned.
“Anything without any underlying whose valuation is dependent entirely on make-believe is nothing but 100 per cent speculation, or to put it very bluntly, it is gambling. In our country, we do not allow gambling. If you want to allow gambling, treat it as gambling and lay down the rules for gambling, but that’s not a financial product,” Das had said in his view on cryptocurrencies in January.
The governor had also said that RBI’s ability to decide monetary policy, to decide on the level of liquidity that needs to be maintained and the level of money supply M3 that has to be maintained in the economy will get undermined if transactions are allowed in cryptocurrencies.
As a move to strengthen the oversight of crypto-based transactions, the government last month brought trading, safe-keeping, and related financial services involving VDAs within the purview of the PMLA, 2002.
The government has also disclosed to Parliament that it has collected Rs 157.9 crore till March 20, 2023, through tax deducted at sources from the virtual digital assets.
