India, the world’s fastest growing economy, has long been indecisive about regulation with respect to cryptocurrency. Today, however, national publication The New Indian Express reports that the government’s interdisciplinary committee has recommended the creation of a strict framework for the growing digital assets space.
While not ideal for India’s many cryptocurrency investors, the legalization of cryptocurrency — with whatever stringent laws attached to it — will be a welcome sign for those who have been left stranded since the government stopped banks from serving exchanges.
An official said:
We have already had two meetings. There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders. Deliberations are on. We will have more clarity soon.
Indian officials first wish to obtain an understanding of the space before passing an official commandment. One member described how the panel had worked with industry experts to obtain a better understanding:
We have also taken inputs from cryptocurrency exchanges and experts and will be examining legal issues with the law ministry. It’s a complicated issue. Once all aspects are decided, then we will have more clarity.
The panel is next expected to meet in January, which should hopefully bring more clarity to the space.
Without a clear idea of what blockchain and digital assets could mean for the nation, India could stand to lose a lot of ground against other nations that are already prepping for a digital economy.
Citizens, meanwhile, are quite enthusiastic about cryptocurrency. The topic is popular in the country, and a number of teams are developing their own solutions.
India is Edging Towards a Stance
Rumors of a government-backed crypto asset and an outright ban have been making the rounds, and recently, a preliminary panel concluded that cryptocurrencies would not be a good idea for the country and called for a ban.
Earlier this year, the Reserve Bank of India (RBI) commanded that banks stop serving any crypto-related services, effectively ending trading for the nation’s citizens and operations for exchanges. Insiders fought back, taking the order to court, but the order was upheld.
India’s Income Tax Department concurred with the panel’s conclusion that cryptocurrency should be banned, while n February Finance Minister Arun Jaitley stressed that cryptocurrency would not be considered as legal tender in India, but blockchain technology itself would utilized, if possible.
Despite the strong sense of negativity in the country regarding the emerging asset space, it may be the case that India does not want to be left behind with what could be a total revolution for the global economy.
Ostensibly, India’s decision to treat the space harshly stems from consumer protection and the prevention of money laundering, though how the specific laws will affect the market as a whole is yet to be determined.
Being such an unprecedented asset class, it’s not just India but the whole world that will have to take a surgical approach.