After a tense year, it appears that the government of India is softening its stance towards cryptocurrency by making it legal and regulating it.
This year has not been a good one for cryptocurrency enthusiasts in India. First, the value of the crypto market has dropped dramatically as bearish pressure continues to rule. Second, the government of India, as well as the Reserve Bank of India (RBI), cracked down hard on cryptocurrencies, essentially crippling the industry. Now it appears that the government is softening its stance and will actually legalize and regulate the disruptive technology sometime in 2019.
Bitcoin Under Siege in India
The entire crypto marketplace has been in the crosshairs of the Indian government for the last few years. An interdisciplinary committee set up by the government in March 2017 met to discuss the new technology. Their eventual recommendation was to have a total ban take immediate effect.
This was followed by the Reserve Bank of India sending out a circular directing all financial institutions to sever any ties with cryptocurrency exchanges and traders. Needless to say, this had an immediate and dramatic impact upon the industry within the country.
Within short order, this circular was challenged in court, which was to be settled by the country’s apex court. The decision was delayed several times, and the court eventually asked the government to issue some guidance on the issue by the end of the year.
Now it appears that such guidance is on the way, and it is welcome news.
Cryptocurrency to Be Legal and Regulated
A second interdisciplinary committee was set up under the leadership of Department of Economic Affairs secretary Subhash Chandra Garg. Other members of the committee include the revenue secretary and various officials from the SEBI, RBI, and MEITY.
Reports say that the committee is working on guidelines for making cryptocurrency legal while putting in very strict rules on their regulation. The goal is to provide consumer protection while combating money laundering and terrorism. An official said to the media:
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.
The committee is expected to meet again in January 2019. Members expect to add insights gained by various FATF and G20 meetings held around the world concerning cryptocurrency. The official added:
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.
It’ll be interesting to see what regulations are put into place. As of now, several exchanges have left India to more crypto-friendly locations, such as Malta. If the regulations are not too onerous, it may help bring back some platforms that decided to look for greener pastures.
What do you think the new crypto guidelines will look like from the Indian government? Let us know in the comments below.
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