The Indian government panel appointed to recommend cryptocurrency measures has reportedly submitted its report to the country’s finance minister, suggesting a new legal framework for cryptocurrencies. The actual content of the report has yet to be announced publicly. Industry participants weigh in on speculation about the report’s content.
Panel Report Submitted
The panel appointed by the Indian government to draft a set of standards for cryptocurrencies has submitted its report to the finance minister, Cnbc Tv18 reported on Friday. Quoting anonymous sources, the news outlet wrote:
Ending the speculation on virtual currencies such as cryptocurrencies and bitcoins, a government panel has suggested that the government should consider framing a new law for regulating that space.
Subhash Chandra Garg.
This panel is headed by Subhash Chandra Garg, the country’s Economic Affairs Secretary. In November, Quartz India reported that the government’s counter-affidavit filed with the country’s supreme court stated that this panel would “deliberate the draft report and the provisions of the draft bill on virtual currencies” in December.
The sources also said that the panel suggested “a new sovereign backed virtual or cryptocurrency may be proposed considering global circumstances; probably at a later stage,” Cnbc Tv18 wrote.
Content of the Report in Question
The report by Garg’s panel has not been made public and no official announcement has been made about its content so there is only speculation at this point.
Cnbc Tv18 did not offer any concrete information about the content of the report either. The news outlet was only able to quote anonymous sources as saying, “The panel has suggested that a new legal framework within the Reserve Bank of India (RBI) guidelines should be brought in to ban cryptocurrencies and the law should clearly specify that any kind of dealing in such currencies should be treated as illegal.”
Commenting on Cnbc Tv18’s reporting, Nischal Shetty, the CEO of Indian crypto exchange Wazirx, told news.Bitcoin.com:
Several times we’ve heard such stuff in the news before. Until we get to see the report I would not suggest anyone to jump to conclusions.
Shetty has been running a Twitter campaign to urge the government to introduce positive regulation for the crypto industry in India.
The word “ban” has been used in Indian crypto-regulatory references before but its meaning has so far been open to interpretation. Quartz India reported in October on a government meeting which discussed “an appropriate legal framework to ban use of private cryptocurrencies in India.” Crypto Kanoon, a platform engaged in crypto regulatory analysis, pointed out to the news outlet that “the word ‘use’ may imply that buying, selling, transacting, or its conversion into rupees may be banned but not possession itself.”
Furthermore, several announcements by the Indian government have been mistaken by some as cryptocurrencies being banned or made illegal. For example, in his February budget speech, the finance minister said that the Indian government does not consider cryptocurrencies legal tender. Some media outlets subsequently misinterpreted his words as meaning cryptocurrency are illegal.
The CEO of Indian crypto exchange Unocoin, Sathvik Vishwanath, told news.Bitcoin.com:
The finance minister was clear: cryptocurrencies are not legal tender in India. He did not say that they are not legal in India. There’s a huge difference.
The RBI crypto banking ban has also been mistaken by some as a general ban on crypto.
Challenges of Banning Crypto
Naimish Sanghvi, founder of Coin Crunch India publication, shared with news.Bitcoin.com that “Recommendations [such as from Garg’s panel] don’t always immediately convert to law.” While expressing his doubt about the Cnbc Tv18 news report, he explained some challenges the government would face in implementing such measures. “If they ban it, they have to change the coinage act which currently defines only INR coins and currency as official legal tender,” adding that any change to the existing law to account for cryptocurrency “has to go to parliamentary approval as a law.”
Vishwanath additionally told news.Bitcoin.com that at the most recent supreme court hearing of the petitions against the RBI crypto banking ban, “our lawyers have asked for a date where significant time is given to us to hear on the matter and move towards an order,” noting:
I foresee a significant chance that the supreme court will provide an interim relief. In India, regulation takes a long route – so there may be some drafts by December but not the regulation itself.
As for whether the Indian government would be able to ban crypto, Shetty told Quartz India in November that “even if the government decides to ban possession [of cryptocurrencies], it will be just impossible to implement it.” He elaborated that even if “The government can successfully ban the known, big exchanges; but then small, hyperlocal exchanges will possibly come up and it will be extremely difficult to keep track of, and block them.”
What do you think the Indian government will do about crypto regulation? Let us know in the comments section below.
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