India has been going through a hot dispute in recent months about cryptocurrencies. It has been a while since Indian authorities wanted to ban usage of private digital assets. The government has created an inter-governmental committee with the main task to study the cryptocurrencies and propose a legal framework for its usage, but instead of it, the committee suggested a ban on using cryptocurrencies as a whole in India. While Indian authorities did agree on it, the country’s crypto community started protesting the ban. The pressure coming from the community is so strong, that the government had to review their decision.
According to the recent update on the matter, an interdisciplinary committee, which came up with the cryptocurrency ban idea has changed its mind and now Is in favor of legalizing and regulating cryptocurrencies rather than banning and pushing it away from their economy. The committee, which was set up by the government, already had two meetings. According to the official who was attending the panel discussions after the two meetings there is a consensus that cryptocurrencies cannot be dismissed as completely illegal. On the contrary – it should be legalized but with the strong rides. As he told the Newspaper New India Express, the negotiations are still going and soon there will be clarity about this matter.
The news was quite surprising for the Indian community as it came several days after the major news channels reported that the same committee is going to ban usage of cryptocurrencies within the country’s border. The Indian government is actively interested in these matters, as there is a second committee that was formed by them to study this lucrative sector. The committee members include the secretary of revenue and other officials of The Securities and Exchange Board of India, officials from the Reserve Bank of India and The Ministry of Electronics and Information Technology.
India took big steps for banning cryptocurrencies
Reports about the ban on cryptocurrencies were not just rumors or expectations voiced by the Indian media. During his budgetary speech in Parliament, in February 2018 the minister of finances of India stated the decision and declared cryptocurrencies illegal tender. This statement was followed by the Central bank; they have ordered all banks to stop any business involving cryptocurrency exchange and cooperation with the firms that were using it. With it, the domestic cryptocurrency trading was nullified. In response to the decision of the Central Bank, the crypto businesses that are operating within the country established a consortium and went to the Supreme Court against this order. However, the enforcement from the Central Bank’s side did lead to the shuttering of at least one major Indian exchange.
It is not clear why the officials in India have changed their decision now, was it due to the pressure from the cryptocurrency community? Or have the Indian authorities reconsidered their position since many countries are now working in favor of the crypto market? Banning it fully would leave India behind. In any way, the next meeting of the committee will take place in January 2019. As the officials state they are negotiating with cryptocurrency exchanges and experts, alongside with the law ministry to decide all the aspects of the new approach to crypto. It will be interesting to observe how the processes will be developed in India and all we can do is to wait until the meeting and have more clarity about it.
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