Ban on private cryptocurrency is the only way possible, says TMC's Saugata Roy

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"However, the government said it will prohibit all private cryptocurrency but allow for exceptions to promote the underlying technology of cryptocurrency. Cryptocurrency uses blockchain technology which is a new technology. But I think that in our country if we allow cryptocurrency, it is already is being used by 10 million people that is one crore people. It will me create havoc in the market," he said.

Also, Roy said cryptocurrency is a currency that is not backed by any assets, unlike the currency floated by the Reserve Bank of India (RBI). Therefore, it could lead to speculation, it would encourage gambling, encourage terror funding, and all sorts of things.

According to Roy, "I am quite sure that the bill that will be brought by the government will propose a ban on private cryptocurrency. The main reason for the ban  is that major economies in the world do not allow due to lack of underlying assets, it can be used for illegal purpose."

Roy said the RBI itself is worried about the impact on inflation, forex, and fears that it may create economic imbalance. So there is little scope for keeping cryptocurrency and imposing some sort of regulation through the RBI. The RBI may create an official digital currency that will be the only digital currency in vogue.

Also Read: New cryptocurrency bill: What we know so far

In the bill, the government will define the uses of cryptocurrency, said Roy adding that if it is allowed to be treated as an asset or a commodity, as a section within the government has argued it will pave the way for trading on exchanges.

China which is now become the biggest economy in the world has been cryptocurrency totally, and major economies do not allow cryptocurrency, he added.

"At this point of time, though the bill is not finalised and though the copy of the bill has not been circulated. I dare say yes that the government will go for the ban on cryptocurrency. It will allow the RBI to float a digital currency and it will only allow the use of technology for this purpose," Roy said.