Cryptocurrencies in India: Govt body favours ban amid RBI's skepticism

The Investor Education and Protection Fund (IEPF) Authority, which comes under the corporate affairs ministry, showed support for banning cryptocurrencies. "When it comes to investor protection, the IEPFA has to take a stand against certain things. Against Ponzi schemes, we are taking a stand. We think that cryptocurrency is a Ponzi scheme and it should be banned," IEPFA CEO Anurag Agarwal said.

Indian central bank, RBI, has long looked down on cryptocurrency projects, banning Indian banks from conducting any business with crypto companies last year.

Cryptocurrencies are based on blockchain technology and there are concerns about its viability in the long-term and risk to investors, especially considering steep fluctuations in the prices. These are digital units in which encryption techniques are used for trading and these currencies operate independently of a central bank.

IEPFA CEO Agarwal said the authority plans to start gathering "primary data" from persons who have put in their money in chit funds and deposit-taking schemes. A mobile application, as well as an online platform for such investors, would be introduced in 10 days, he added.

Such a system would help in having an understanding of entities taking deposits as well as curb illicit money-raising activities.