Tarun
Sharma & Sidhartha Shukla
Moneycontrol News
BJP MP Kirit Somaiya
has raised concerns on how there is a lack of regulatory structure around
bitcoin and wants it to be declared illegal in the country.During demonetisation,
bitcoin trading volume spiked a lot in India and many were worried that it
was being used to launder black money.
Speaking to
Moneycontrol, Somaiya said that he is expecting a meeting with a senior
official from the National Intelligence Grid (NATGRID) to discuss the sudden
jump in bitcoin trading in India during the period of the cash ban.
After the government's
landmark decision to demonetise Rs 500 and Rs 1,000 currency notes, those
hoarding black money tried their hand at various ways through which to convert
their ill-gotten stash.In fact, in the
immediate wake of the decision, prices of alternate asset classes such as gold
or real estate shot up in the gray market. Unscrupulous jewelers
and developers were able to back-date purchasers and pass off old notes
which were used to buy assets in the past. Reports also came
which suggested bitcoin to be a possible means to launder black money.
In the Parliament,
Somaiya has hit out at the increasing use of bitcoin in India and has termed
the digital currency as "hypothetical" and a "pyramid ponzi
scheme". He has further said
that if bitcoin is being used like a currency then it falls under the duty of
the Reserve Bank of India (RBI) and the central bank cannot afford to be a
silent spectator and needs to act.
Below is the complete transcript of the conversation with BJP MP
Kirit Somaiya.
Sidhartha: You have raised concerns over the use of bitcoins in
India and how in the name of this technology some are trying to dupe innocent
people. You want it to be declared as illegal in India as there are no
regulations around it but some countries have laid down rules under which it
works and recently Japan even declared it as a currency. What are your views on
that?
A: It is illegal. How
a private person or a few individuals remain behind the curtain can develop
their own currency? This self-regulation is nonsense. In Ponzi scheming,
multi-level marketing (MLM), pyramid structure all such argument have been
floated.
This is a civilised
society, a currency can be owned, floated, regulated, monitored only and only
by a sovereign government. Block technology is a technology. It cannot be
converted into currency. A group of people come together and they say we are
having our own transaction, what is this? A simple technological legal meaning
is 'hawala', nothing else. Simple meaning is non-transparency. If you want to
deal among yourselves, you deal through any currency. It could be through
dollar, it could be pound, it could be rupee. But you are developing in the
name of a modern transaction and it cannot be allowed because nobody owns this,
nobody owns it, nobody regulates it, how can I allow unregulated currency? All
these are absurd arguments.
The few with vested
interests, people just like zamindars, crony capitalism supporter, they come
out with this argument. I cannot agree. I have told RBI also and SEBI also. On
one side, if you declare it is illegal, how can you allow it to be functioning
in the country? It is impossible.
Tarun: So, why the investigation agencies are are sitting on it
and not taking any actions against them? With the NSEL scam we saw that regulatory
vacuum was exploited to fool people.
A: Due to our effort,
now in parliament, the government have gone on record, it is illegal. The first
time now, a small group of people, experts representing SEBI, ministry of
economic affairs, RBI, revenue is formed. So, this is absurd what Japan has
done and I do not agree with Japan and what has happened in Japan, nobody
knows. It is our country, our nation. I want to see what is bitcoin.
On one side, they are
using the word currency, once you use the word currency, it is automatically
illegal. How can civilised society allow it? Today bitcoin has come, tomorrow,
'chandi-coin' will come, third day, 'plastic-coin' will come. What is bitcoin?
What is its value, what is its net-worth? What is its guarantee? And now
bitcoin is used for purchasing drugs in colleges. And now, a mis-sell is being
done that you can invest in this bitcoin.
What nonsense is going
on? If it is a currency, how can a person invest in it? And they say it will be
increased by 4,000 percent.
So all this is nothing
but a scam. I recollect, I told RBI people, try to recollect 2007, 2008 and
2009 that foreign exchange scam, India has lost more than Rs 1 lakh crore. You
may recollect that yen, yen price will go up, the Indian bank also were in the
queue. All top businesses and banks have lost hundreds of crores of rupees. And
now the regulator in America has found out that it was a scam. And top
companies have been penalised. What has happened in India? Nothing.
So, RBI wants all
authority, RBI wants all power. Then it becomes responsibility of RBI. If they
cannot allow, I disagree with RBI. They said it is illegal, now people who are
doing business, they are doing that at their own risk. I do not agree. RBI had
to take action and I will see that they do take action.
Tarun: Even the Sebi also then?
A: Certainly, because
SEBI has asked me to give some information about the exchanges, so I am trying
to collect the information on how it can be traded on the exchanges. But all
such exchanges in a way are illegal, but I have told somebody from Zebpay, I
did not listen to them.
If they are official
exchange, go and get regulated from SEBI. How a private exchange? They say we
are on net. If you are on net then how my Indian money is invested, how? In
air? You have to pay something initially.
Either you have to
give something in kind or in rupee or in dollar, that means it is a currency.And if it is a
product, bitcoin, what they are doing, what are they manufacturing, what are
the services, what is the profit and loss account, what are the balances, who
is controlling bitcoin? A group of people? Then it is a barter system.So, we want to go
1,000 years back? What is blockchain? Blockchain is used for currency or for
trading transaction. That means this is hawala or barter system. So, I am very
much against it.
Tarun: Do you think that during demonetisation bitcoins were
used for money laundering or tax evasion?
A: A few people have
expressed such concern and now, I think I am expecting a meeting with a senior
official from the National Intelligence Grid (NATGRID). I do not want to pass a
comment on that. It could be. As the authorities check what was the volume and
behaviour of bitcoin during that particular period.
Tarun: Transactions over these exchanges happens on the banking
side, so how come banks are allowing this kind of trade?
A: I am going to
approach Enforcement Directorate (ED) also. It is the duty of ED, some foreign
transactions are being taken place in India, through India, through Indian bank
account, somebody has to check it. And that is why I am very unhappy with RBI
that how they can knowingly ignore such a thing.
It is the parliament
of India, it is the constitution of India, the central bank has to not only
regulate but monitor it also.
If through Indian bank account, some transaction has taken
place with the foreign banks, if bitcoin is a foreign product, that means it is
a foreign transaction, they have to submit details and that is why, I am
planning to approach ED and I have written to the government in that committee,
please include ED also.
No comments:
Post a Comment