The Parliamentary Standing Committee on Finance in India has recently issued a statement saying that bitcoin and cryptocurrency must be regulated given that the digital currency and blockchain spaces “cannot be stopped.”
India May Be Moving In the Right Direction
This is a huge statement coming from an authority based in India given the country’s up-and-down relationship with what is arguably one of the largest and fastest-growing financial industries out there. India has long worked to stop cryptocurrency in its tracks. The first major attempt arose in the year 2018 when the Reserve Bank of India (RBI) barred all financial institutions from doing business with crypto and blockchain enterprises.
This story was largely reported as India banning crypto transactions altogether, which wasn’t quite the case. Instead, crypto businesses could not gain access to bank accounts or traditional financial tools and products. This rule remained in place for about two years until the Supreme Court of India ruled that it was unconstitutional, and thus had to be removed quickly.
Once this was decided, India looked like it was going to be one of the world’s biggest crypto havens, and it was… for a couple of weeks. Not long after the Supreme Court decided that crypto businesses could, in fact, gain access to traditional banking services, the country’s Parliament stated it was considering a full ban on crypto activity. This meant no trading, no transactions, nothing. If you were caught engaging in any sort of crypto-related action, you were facing prosecution and financial penalties.
This was a strange move in many people’s minds given that the Supreme Court had recently exhibited a much more relaxed attitude regarding crypto, so the idea that Parliament would not take this to heart was a bit disconcerting. Nevertheless, fears remained in India regarding the future of crypto for more than a year, but now it looks like those fears can potentially be put to rest.
At the time of writing, there is very little information about where India will go when it comes to digital assets. Right now, all we can go on is an anonymous source that was privy to the first meeting held by the Committee, though this source claims that there was heavy discussion regarding the regulation of crypto. It is not known how the space will be regulated or who will do the regulating.
Still Some Questions That Need Answers
The source claims:
There was a consensus that a regulatory mechanism should be put in place to regulate cryptocurrency. Industry associations and stakeholders were not clear as to who should be the regulator.
It can be stated, however, that the panel involved in the discussion referred to cryptocurrency as “some sort of investors’ democracy.” The Committee still has several concerns they want addressed, but it appears as though India is moving in a much more positive direction. We’ll have more on this story as it develops.