Nationalist organization in India calls for Bitcoin ban as government stops delaying regulation

A nationalist organization in India has passed a resolution calling on the government to ban digital currencies in the Asian country. The Swadeshi Jagran Manch (SJM) believes that digital currencies pose a threat to financial markets and are a hotbed of illegal activity, including money laundering. However, any legislation will take a few months longer than expected, with insiders revealing that Parliament is delaying regulation of digital currencies to focus on more pressing matters.

The SJM is an economic and cultural organization founded in 1991. It is affiliated with the Rashtriya Swayamsevak Sangh, an Indian right-wing nationalist paramilitary organization with massive influence in the Indian government. With a focus on the Indian economy, the SJM takes a nationalist stance on most issues as it seeks to protect local businesses. It has lobbied against Chinese tech companies like TikTok and Huawei, called for data localization, called for tougher rules for e-commerce giants, and more.

Digital currencies have joined a long list of activities that the SJM opposes. The organization recently passed a resolution calling on Narendra Modi’s government to ban the buying, selling, investing or storing of digital currencies in India.

In a resolution it passed during a recent meeting, the organization stated, “The government should rightly ban the purchase, sale, investment and other dealings in cryptocurrencies by residents of India.”

Those violating this law face fines or jail time or both, the SJM suggested.

Also, according to the SJM, digital currencies experience a lot of speculation and price volatility. If it were allowed to integrate into the financial market, the impact could be massive, it said. If legalized, they would also encourage illegal activities such as money laundering and terrorist financing, she added.

“The Reserve Bank of India digital currency issuance law should be drafted quickly. The CBDC should be considered legal tender. Cryptocurrencies like Bitcoin, Ethereum, etc. should not be recognized as assets or digital assets as they indirectly become a medium of exchange like currencies,” the resolution summarized.

Digital currency bill will be delayed even further

As the SJM urges Parliament to move quickly and regulate digital currencies, sources have revealed that a bill designed to do just that will be delayed even further in the new year. India’s lawmakers will resume their activities in January, but the focus will be on other, more pressing issues.

Known as “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021,” it has been included in the roaster of legislation due to be debated in the Lok Sabha (the lower house of Parliament) this year. As CoinGeek reported, the Lok Sabha was supposed to discuss the bill during the winter session, which ended just before Christmas, but it didn’t. Now, according to sources in India, the law could be delayed even further.

The next parliamentary session is scheduled to begin at the end of January. Known as the Budget Session, its main focus is on the country’s budget and all resources and time go into it. The Treasury, which would have played a key role in shaping digital currency regulations, is also fully focused on the budget.

“During the budget session, the Treasury assigns sectoral responsibilities to each and every senior official and as a result nobody carries out their normal duties,” explained Vivan Sharan, a policy expert in India who has previously worked with the government.

Subhash Garg, a former Treasury Department official, believes budget debates will stretch into late April and possibly beyond.

“One cannot speculate whether the bill will come in the July monsoon session. There are much deeper problems. I don’t know if the government will expand the scope of the bill. I could take even longer and maybe should take longer,” he told an outlet.

The delay could be a godsend for the digital currency industry. As it stands, the bill is very restrictive on the industry and even includes sections calling for a ban on “private cryptocurrencies.” However, with that being delayed, the industry could take this time to engage more with regulators and hopefully get more favorable regulations.

The Indian government has indicated that it is ready to take a friendlier stance towards the industry. Prime Minister Modi has called on India to lead the global effort to “design emerging technologies like social media and cryptocurrencies to serve to strengthen democracy, not undermine it”.

As CoinGeek reported, he called for a progressive and forward-looking approach to digital currency regulation.

Cryptocurrency scams still abound in India

As Indians wait for regulations, a police commissioner has urged citizens to beware of digital currency scams. Shikha Goel, the Additional Police Commissioner in Hyderabad, India, warned citizens about the increase in cybercrime facilitated by digital currencies.

Goel revealed that most scams revolve around get-rich-quick schemes that lure investors with false promises. Once hooked, scammers take off with their money.

“They will send victims a link to a website or app and tell them how to buy cryptocurrency. After a successful purchase, scammers ask them to transfer it to their private wallet for much higher returns,” Goel said.

So far, Hyderabad Police have filed 16 cases related to digital currency fraud. Of these, 14 related to investment and trade.

“People have been cheated out of ₹3.45 crore ($460,000) in their greed for higher returns against cryptocurrency investments,” the commissioner revealed.

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