Govt should allow cryptocurrencies, former finance secretary S C Garg

The government should regulate and control cryptocurrencies instead of prohibiting them, former finance secretary S C Garg said on Thursday. Addressing a virtual event organised by industry body Assocham, Garg also said there is undue emphasis on cryptocurrencies and these digital assets will require standard frameworks.

"I don't think we still have full clarity and understanding about how to regulate cryptocurrencies...Regulate, control cryptocurrencies but allow the crypto assets, encourage the crypto services," he said.

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Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds, operating independently of a central bank.

The RBI had virtually banned cryptocurrency trading in 2018 and had directed all entities regulated by the central bank to cease dealing in virtual currencies. The Supreme Court had asked the Centre in 2019 to frame policies for crypto, and in 2020, struck down the curbs imposed by the RBI.

All Indian companies should only be keeping digital accounts in the next three to five years, Garg said, adding "it is possible to integrate national accounts with company accounts."

In the times to come, the entire system of accounting, auditing and reporting can be automated, he added.