Is India Close to Taking a Stand on Cryptocurrency?
After years of uncertainty and ambiguity, government leaders in India may at last be close to formalizing domestic cryptocurrency laws. The inter-ministerial committee set up to investigate and draft regulations for digital currencies is in the “finalization stage.” So what comes next?
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A Hint of Cryptocurrency Regulation in India
The Department of Economic Affairs, a government agency that formulates and monitors India’s economic policies, confirmed last week that the nation’s inter-ministerial committee on digital currencies is almost ready to put forth cryptocurrency laws in India.
However, the draft policies suggested by the committee have not yet been made public and all participating government agencies have remained tight-lipped on the matter to date.
The confirmation came in response to a Right to Information (RTI) application filed by local crypto-focused news portal Coin Crunch India in late 2018. The appeal aimed to sort out fact from fiction over developing cryptocurrency legislation in the nation.
In particular, the RTI application requested information on two main points: firstly on whether the inter-ministerial committee had yet submitted a report and secondly whether the report suggested an outright ban on bitcoin.
“The report of the Committee is in the finalization stage, hence, prohibited under section 8(3) of RTI Act, 2005,” an official with the Department of Economic Affairs noted in an official written response to the RTI.
Although brief, the response revealed the report is in its final phase and thus possibly close to public disclosure. However, a fixed timeline for any future related announcements wasn’t provided, and the reply could be subtle diplomatic maneuvering as policymakers continue the task at hand with no definite end in sight.
A Lot of Moving Parts
So, once more for Indian cryptocurrency aficionados, it’s not clear what comes next.
“We have already had two meetings — there is a general consensus that cryptocurrency cannot be dismissed as completely illegal,” a source close to the committee reportedly told domestic outlet New Indian Express last year.
“It needs to be legalized with strong riders. Deliberations are on.”
As for the committee in question, it consists of members from the nation’s Ministry of Finance, the Reserve Bank of India, the Ministry of Electronics and Information Technology, the National Institution for Transforming India, and the Ministry of Home Affairs. The body is directed by Subhash Chandra Garg, current Economic Affairs Secretary of India.
“The current crypto verdict is on the top of the list of the Supreme Court to be heard on February 26th,” Dwaipayan Bhowmick, an advocate who had filed a petition in court demanding the government’s stand on cryptocurrency, said in speaking to Bitsonline.
Furthermore, independent enterprises and groups have offered their own cryptocurrency recommendations to the nation’s powers that be. International law firm Nishith Desai Associates was one of these private entities, who has gone on the record in favor of legalizing India’s cryptoeconomy.
The law firm asserted that the risks and concerns of cryptocurrencies will fade away against its benefits in the long run. The firm also said that instead of banning cryptocurrencies, the government should rather bring them under the regulatory fold.
In that sense, the law firm proposed a multifaceted approach by regulating digital currencies as security tokens, utility tokens, and payment tokens, much like the United Kingdom’s Financial Conduct Authority is approaching these assets.
Will the cryptocurrency scene in India soon have formal rules to go by? Would that be a good or bad thing? Share your views in the comments section.
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