India May Reportedly Deliver Long-Awaited Cryptocurrency Regulations Next Months


According to the latest report from Quartz India, it seems that the government of India may be ready to reveal their official stance towards cryptocurrencies. The source states that the new set of regulations could be ready as soon as next month.

This news came after a prolonged waiting period as the financial ministry panel in charge of the regulations draft, led by the department of economic affairs’ secretary, Subhash Chandra Garg, was set up in November 2017.

A government’s counter-affidavit as a source of information

The whole case of cryptocurrencies in India came to the attention of the public after the Reserve Bank of India (RBI) ordered all country’s bankers to stop doing business with India’s cryptocurrency exchanges in April this year.

That move made those businesses unable to conduct their operations, so they dragged the RBI to court and filed an official affidavit with the Supreme Court.

On October 25th, the official hearing took place, and, in order to proceed, the court asked the government to file a counter-affidavit, which was examined by Quartz.

Quartz reports that, besides making a counter-argument, government’s counter-affidavit also specifies that the mentioned inter-ministerial committee already met twice, in November 2017, and again in February this year.

Furthermore, it states that it was mandated for the panel to devise a regulations draft by July 2018, but that the first legal proposition of new crypto regulations had to be delayed, possibly even until March 2019.

India tried to regulate crypto before

The government of India, led by the prime minister Narendra Modi, had made an attempt to regulate cryptocurrency business in the country even before the Garg’s committee was formed.

In March 2017, they had appointed a task force to develop an outline of regulations concerning the blockchain technology and cryptocurrencies. The government’s task force reportedly came up with a series of recommendations, among which was the one which stated that investors should be discouraged from trading cryptocurrencies.

It is noteworthy that this appointed team also suggested that the government should form another body to further investigate all possible legal options, which should consist of the officials from:

  • RBI, Department of Economic Affairs (DEA)
  • Securities and Exchange Board of India (SEBI)
  • Department of Revenue
  • Department of Legislative Assembly
  • Department of Consumer Affairs
  • Ministry of Electronics and Information Technology (MeiTY)

Although the task force’s recommendations have never been officially published, the information about how they suggested that exchanges should be choked has leaked to the press, which is perhaps the reason why the government had filed that document along with the counter-affidavit in a sealed envelope.

A done deal?

By taking the matter to the Supreme Court, India’s cryptocurrency exchanges have done the best they could in order to change their business fortune, at least when their country of origin is concerned.

However, considering the fact that besides Garg, members of the committee devising a regulatory plan are BP Kanungo, deputy governor of the RBI, and the chairman of the Securities and Exchange Board of India (SEBI), Ajay Tyagi, it is difficult to imagine that their outline of the new law could be any different than their past actions. 

Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your own research and/or consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

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