New Delhi: RSS affiliate Swadeshi Jagran Manch (SJM) has demanded a ban on cryptocurrency. The SJM has exhorted the Reserve Bank of India (RBI) to launch its digital currency as soon as possible to check the “unauthorised use” of private digital currency.

Cryptocurrencies have been on the RBI’s radar for long. Calls to control it have also been examined at length by the Union government, which drafted a bill — the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 — that is yet to be tabled in Parliament.

At the two-day ‘Rashtriya Sabha’ of the SJM in Gwalior, held over the weekend, a resolution was passed that said cryptocurrencies have no underlying assets, their issuers are not identifiable, they lead to heavy speculation that can damage the financial market, and their recognition may result in money laundering and terror financing.

The SJM also argued that allowing cryptocurrencies can result in capital market account convertibility (freedom to conduct investment transactions, especially in foreign countries, without constraint) through the back door.

However, the RSS affiliate said blockchain technology should not be linked to cryptocurrencies and that using it in all spheres of economic or social activities should be encouraged.

Millions Invest In Cryptocurrencies

The RBI has been in favour of clamping down on cryptocurrencies. In March 2020, a RBI ban on them was overturned by the Supreme Court. According to the SC verdict, the RBI cannot issue instructions to banks to not deal with virtual currencies.

With this, crypto exchanges started trading digital currencies on a large scale. Although there is no official information about this, it is estimated that about 20 million people in India have invested money in cryptocurrencies.

The SJM noted that people, even villagers, are attracted towards virtual currencies because they feel that they can turn a quick profit by putting their money in it.

The SJM resolution said, “It’s a wrong notion that cryptocurrency is a currency. Currency means an instrument issued by the central bank and guaranteed by the government. Cryptocurrencies are privately issued virtual coins that have no legal recognition.”

“Crypto is being used by criminals, terrorists, smugglers and persons involved in hawala. Recently, when cybercriminals blew up data of companies through a computer virus all over the world and ransom was demanded in Bitcoins to return the same, the world became aware of criminal use of Bitcoin,” it added.

“Such a valuable virtual asset is known only to its holders. Authorities will come to know only when it is transacted through a bank. Although it can be taxed when its transaction is declared, if it is sold abroad, and not in the country, it will not be taxed,” the resolution said, adding that “in fact, crypto is not a fiat asset (currency that is declared legal tender)”.

“It cannot be shown in the balance sheet of a company or an individual. That is, crypto is becoming a medium for evasion of income tax, GST and many other types of taxes,” the resolution said.

SJM national co-convener Ashwani Mahajan said “Due to the ever-increasing price fluctuations in the value of Bitcoin and other types of cryptocurrencies and their ever-increasing demand, a huge amount of country’s money is being put into this. It is like the dark web. Where is this money going, in whose pocket it is going… nobody knows.”

The SJM resolution adds that a major argument against digital currencies is that its mining consumes massive amounts of electricity, increasing chances of power shortages. “This is one of the biggest arguments China has made in banning cryptocurrencies,” the resolution said.