Rattled by the government’s hardline stance on cryptocurrency use in India, a group of exchanges is suggesting a plan that they say will give the regulators a ringside view of the action: Hook up the wallets with the country’s national ID system.
The Internet and Mobile Association of India (IAMAI) is proposing the creation of “a central repository of users” that will record cryptocurrency-related transactions in real time. Ajeet Khurana, head of the IAMAI’s Blockchain and Cryptocurrency Committee, told the Economic Times the proposal entails linking accounts on domestic exchanges to the users’ national IDs—commonly known as the Aadhaar ID or Permanent Account Numbers (PAN).
This way, Khurana said concerned authorities will be able to pull up the data of all buyers and sellers on domestic exchanges through their Aadhaar IDs. Khurana’s committee counts seven cryptocurrency exchanges among its members.
“Though the government has specified that cryptocurrencies are not legal tender, we hope to present to the government committee that people can still trade in them like they do in ‘stock or gold,’” said Khurana, noting that “this is one of the proposals we are planning to submit to the government committee which is looking into the issue of cryptocurrency.
Aadhaar is India’s latest push towards digitization, although the biometric identification card has been under fire recently over privacy surveillance concerns. PAN, meanwhile, is 10-digit alphanumeric number issued in the form of a laminated card by the Income Tax Department for the purpose of income tax and has been around for several years allowing residents and foreign nationals to conduct monetary transactions in the country.
While the PAN has been around for several decades to enable citizens and foreign nationals to make monetary transactions in India, the country’s Aadhaar ID system is more recent and has been under fire over privacy surveillance concerns.
The proposal to link the wallets of Indian crypto users to their national IDs comes on the heels of Finance Minister Arun Jaitley’s statement that the government will do everything in its power to put an end to cryptocurrency use in the country.
“The government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these crypto assets in financing illegitimate activities or as part of the payments system,” Jaitley said in his budget speech last Feb. 1.
The proposal of Khurana’s group is scheduled to be submitted to the government panel in charge of overseeing cryptocurrency activity this week, and it will be interesting how it will play out, especially for investors in the country. The government panel is expected to announce its recommendations in March.