Government yet to take a view on regulating crypto advertisements: Sitharaman

This comes ahead the Centre’s plans to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, in the Winter session of Parliament which began on Monday.

Sitharaman, however, did not clarify whether the government plans to ban or just regulate cryptocurrencies through the Bill which she said will be introduced once the Union Cabinet gives its approval.

“The Advertising Standards Council of India (ASCI) which governs all advertisements, their guidelines are being studied and the regulations that they have are all being looked into so that we can take if necessary some kind of a position or decision how we are going to handle this,” said Sitharaman in reply to a supplementary question by Rajya Sabha member Sushil Kumar Modi.

Asking whether the government was contemplating a ban on crypto advertisements since they come without disclaimers, Modi said in last four months, there has been a flurry of misleading advertisements on television, print media and social media. “They are promising heaven to the investors. During this T20 World Cup, more than ₹50 crore was spent by the crypto exchange companies,” he added.

Sitharaman said the country’s regulators–Securities and Exchange Board of India (Sebi), Reserve Bank of India (RBI)–and the Centre have been issuing statements in an attempt to communicate that cryptocurrencies are risky and people investing in them should be conscious of what they are doing.

Answering a question by Rajya Sabha member Swapan Dasgupta that a ban on cryptocurrency may not be proper since the technology is still evolving, Sitharaman said, “Keeping the propriety of the house, particularly since the house is in session and the fact that there is a bill being proposed sooner rather than later, any answer I would give now will preempt the discussion when the government comes with the bill with all its nuances.”

Replying to a question on whether Indian banks have the requisite technology and training to regulate cryptocurrency transactions, Sitharaman in a written reply said, “The question of monitoring crypto-currency transactions, if any or regulating crypto-currency transactions, if any is consequent to the passage of the Bill in Parliament.”

On a question of how many people paid tax from transaction of cryptocurrencies and how much tax have been collected, Sitharaman said, “The income earned by crypto exchanges and other crypto service providing platforms is liable to tax under the head Business or Profession under Chapter-IV of the Income-tax Act, 1961. Applicability of tax rate will depend on status and category of taxpayer.”

On crypto frauds, Sitharaman said the government does not collect specific information on crypto currency related frauds. “However, eight cases related to crypto currency related fraud are under investigation by the Directorate of Enforcement. Further disclosure of information may not be in larger public interest,” she added.

On regulating non-fungible token (NFT), the minister said she will not be able to say whether there will be separate framework on NFT or not. “But all these matters are being discussed,” she added.