Indian authorities mull crypto regulation instead of complete ban

Indian authorities are considering introducing regulation for cryptocurrencies instead of imposing a complete ban, The New Indian Express reported December 26th.

Earlier this year, the Reserve Bank of India (RBI) banned the entities regulated by it from engaging with any individual or businesses involved with digital currencies. The ban followed the recommendations from the first interdisciplinary committee set up by the government in March 2017.

In a bid to comply with the RBI’s ban, banks forced exchanges and traders to stop using their accounts for cryptocurrency trading, who, in turn, approached the Supreme Court of India.

The conflicting opinions led to the setting up of the second inter-ministerial committee, led by the Department of Economic Affairs secretary Subhash Chandra Garg. Members of this committee include the revenue secretary and officials from SEBI, RBI, and MEITY.

In October 2018, the apex court had asked the government to submit a report on the findings of the crypto-focused committee it had established. The committee has held two meetings on the issue and is expected to submit its report to the finance ministry by February 2019.

“We have already had two meetings. There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalised with strong riders. Deliberations are on. We will have more clarity soon,” a senior official who attended the panel’s meetings told The New Indian Express.

Globally, at the recently held G20 meeting in Buenos Aires, world leaders reiterated their commitment to regulate crypto-assets. In March 2018, the G20 meeting of finance ministers called for a unified regulation of crypto assets and set a July deadline for recommendations. In July, G20 leaders were looking at an October deadline for reviewing a global AML standard on cryptocurrencies, however, it is unclear if the deadline was met, CoinDesk reported.

Some of the members of the second interdisciplinary committee have participated in G20 and the Financial Action Task Force (FATF) working group meetings on this issue. The insights gained from these meetings are expected to be included in the report.

“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 official added. The panel’s next meeting is likely to be held in January 2019.