On September 2nd, 2019, the Ministry of Finance came up with the Steering Committee Report, which to everyone’s surprise interpreted blockchain technology in a far better way than the previous draft Bill. The draft bill was released on 22nd July this year, which aimed to ban cryptocurrencies. Therefore, this news of the Steering Committee Report coming up is like a sigh of relief to the crypto users.
Top RBI officers and executives from the MEITY (The ministry of Electronics and Information Technology) were included in the panel members for both the previous draft bill and the recent Steering Committee Report. However, the Steering Committee Report is drafted by the students of NIPFP that is the National Institute of Public Finance and Policy.
CREBACO observed the following points on the Steering Committee Report.
- Bitcoin’s global popularity has established its existence in the global cryptocurrency market that includes mobile payments, insurance aggregators, investment advisory, and peer-to-peer lending.
- The report then signifies the importance of cryptographic encryption in the security, confidentiality, integrity, and non-repudiation of assets.
- On the one hand, the report mentions about Blockchain, and on the other hand, it also talks about the potential blockchain applications that are beyond the scope of cryptocurrencies. This makes the whole scenario vague. Also, the report does not talk about the centralized and decentralized features of Blockchain, which is again a downside of the report.
- The report talks about how digital currencies have performed in the past years. It accepts the fact that ICO (initial coin offering) is rising in the Fintech Landscape globally.
- The report also brings into notice, the customer protection framework, by pointing out various scams that took place in the Fintech industry, including the Sharda Chit fund case in India and the payment protection scandal in the UK.
- As a solution to such scams, the report suggests having a grievance redressal cell for the consumers.
CREBACO analyzed the draft bill as follows:
- When the news of cryptocurrency ban took place in India, it was compared to that of China.
- The draft bill interpreted Arun Jaitley’s comments in a wrong way, where he mentioned to ban cryptocurrencies for illegitimate activities and not entirely ban it.
- The analysis report was quiet for comments made by RBI and NASSCOM.
- The report also described the Ripple in an entirely wrong manner.
Therefore, it had a lot of contradictions in its conclusions. And therefore, when the previous draft bill announced the ban of cryptocurrencies, it made no significant changes in people and as such people hardly reacted to the news. However, such news of banning cryptocurrencies by the Indian Government was never confirmed by the Government officials. This is the most surprising factor, and people are considering the news of banning cryptocurrencies from being a fake one just as similar news which spread in October last year.