The news came into light when Narendra Modi, Prime Minister of India clarified it in a counter-affidavit. Presently, India’s top courts are dealing with cases of cryptocurrency exchanges accusing the government of suffocating the ecosystem.
A panel tasked by India’s finance ministry to regulatory norms and guidelines for domestic cryptocurrency trading and the blockchain industry is set to lay bare its draft next month.
Subash Chandra Garg, heads the finance ministry panel that also includes BP Kanungo, deputy governor of the RBI, and Ajay Tyagi, Chairman of India’s market regulator, the Securities and Exchange Board of India (SEBI).
Additionally, representatives from the ministry of electronics and information technology (MeitY) and central board of direct taxes (CBDT) are also on board.
The affidavit explains:
“…currently, serious efforts are going on for preparation of the draft report and the draft bill on virtual currencies, use of distributed ledger technology in (the) financial system and framework for digital currency in India. The draft report and bill will be circulated to members of IMC (inter-ministerial committee). Thereafter the next meeting of IMC will be held so that discussion can take place on the draft report and bill. It is expected that the draft report will be placed before the IMC by next month.”
Cryptocurrencies aren’t bound by a national jurisdiction but are powered by blockchain technology instead, a distributed and ddecentralizedpublic online ledger which is used to record payments. A global network of computers manages the database that records all the deals.
There are around ten big crypto exchanges in India with an estimated user base of up to six million.
Cryptocurrencies don’t rely on dependent on a crypto exchanges wallet as they can be stored on a cloud storage platform such as Dropbox, a pen drive, laptop or a private virtual wallet. Nischal Shetty, founder and CEO of the Indian crypto exchange, WazirX said that “even if the government decides to ban possession, it will be just impossible to implement it.”
If fear of misuse ruled us then we would never have:
1. Electricity for fear of electrocution
2. Cars for fear of accidents
3. Cash for fear of black money
Yet we still have these because benefits outweigh the problems
Crypto is the same. Regulate & win 🇮🇳
— Nischal (WazirX) ⚡️ (@NischalShetty) November 18, 2018
The blockchain entrepreneur requested India’s finance minister Arun Jaitley to focus more on crypto’s potential benefits than its minimalistic misuses. Saying that every industry is prone to have its own set of problems, Shetty believed they should not become the reason to hamper innovation that could benefit the nation’s growth.
India is still a country with no cryptocurrency law. The ban is only psychological and does not merit any constitutional verse. Bitcoin continues to be an entity without a legal definition.
Last month, India’s finance minister Arun Jaitley helmed a meeting of officials of the country’s central bank, the market regulator, and a committee tasked with framing rules to regulate the ecosystem. Together, they are said to have discussed banning “the use of private cryptocurrencies in India.”
Just for reminder, in July the Reserve Bank of India (RBI) banned the country’s banks from servicing businesses involved in exchanging or processing digital assets. At the time, RBI cited risks to financial stability and the security of investors as being the main reasons behind the ban.
And while banking activities for crypto business were suspended, it was not a ban on crypto in India outright. The country’s supreme court continues to uphold the ban even after hearing a raft of petitions.
Since July, the ban has had severe repercussions for the industry. Exchanges in particular have faced difficult conditions, with major platform Zebpay halting operations and relocating to crypto-friendly Malta.
The draft report is expected to reach the desk of the India Inter-Ministerial Committee (IMC) by the end of next month while two meetings will be held to deliberate on the report.