If you thought crypto in India was over, you were probably wrong. According to a recent statement by a high-ranking official, the long-awaited regulations are on the way. A draft framework has been prepared, and authorities in Delhi hope to “wrap this up” as early as the first half of next month. Meanwhile, the Supreme Court has agreed to review a petition against the RBI ban earlier than expected, resetting the hearing for July 3.
COMMITTEE DECIDES THE FATE OF BITCOIN IN INDIA
With cryptocurrency scams gaining momentum in India – the Rs 88,000 crore (estimated) Bitconnect scam is said to be the largest ever Bitcoin (or any cryptocurrency) scam ever – the government has now sat up and taken notice. Even as the Reserve bank of India (RBI) had issued a stern warning on the use and delivery and storage (including investing in) of cryptocurrency, the government’s stand till today is vague. It neither calls it legal, nor does it cal it illegal.
Hence the parking of illicit and dirty money in electronic form has grown in leaps and bounds.
Now the government has decided to set up a regulatory framework for cryptocurrencies and this is likely to be presented in the first half of July. This was announced recently by Subhash Chandra Garg, Secretary of the Department of Economic Affairs at the Ministry of Finance.
As per reports, Garg has said that a draft has been put together and will be discussed in the first week of next month. He was talking to a reporter of ET Now new channel.
Garg heads a committee that has been tasked to determine the future of cryptocurrencies in India. He said in the interview: “We are fairly close to developing a kind of template which we think might be in the best interest of our country. We have prepared a draft which we intend to discuss with the committee members in the first week of July.” He also said that the draft will be talking about “…what part of business should be banned, what should be preserved, and what not.” He said this would all be “wrapped up” within the first week of the month, leaving enough scope for discussions, if any, during the monsoon session of parliament, which starts on July 18.
Garg’s comment does mean that the government might not entirely declare cryptocurrencies as illegal, in fact, as Garg said, the government is unlikely to call them currencies, instead calling them assets.
He has been quoted as saying that the government “…does not read this [cryptocurrency] as currency”, hence no payment system will be allowed to incorporate this mode.
What he wanted to say was that the government was determined to rub out the illegal use of this currency. At the same time, there is a possibility of the government wanting to unlock the value in these currencies, and that can be possible if they are declared legal, in a way. That would mean regulations. However whether it will still be a “currency” or an asset is not clear. It is also not clear, too, how a pricing would be arrived at, whether they are categorised as currency or asset.
Garg had to accept that crypto is not regulated in India. In fact, it is not regulated anywhere, even in Japan, where it has been declared legal. Hence it will definitely be a mammoth task
Read India Legal’s exclusive on Bitcoin scam here.
—India Legal Bureau