India has fallen behind on its plans to regulate cryptocurrency. The winter session of Parliament was supposed to see a new bill introduced that would recognize crypto as a new asset class that could be regulated and monitored. However, this has not yet occurred and thus India’s digital currency future is still in the clouds.
India and Crypto Regulation: What’s Happening?
The good news is that regulatory officials have stated that at this stage, outright banning crypto would be very hard to do considering the impact it’s had on the country and the fact that it’s very difficult to pinpoint users’ identities. An anonymous official stated in an interview:
Banning cryptocurrency would prove to be very difficult as one cannot even determine who the originator is. People can simply use a VPN to access currencies without alerting any authorities.
India has had a very up-and-down relationship with cryptocurrency. Back in 2018, the country announced that businesses delving in crypto and blockchain could no longer gain access to bank accounts or traditional financial tools. This lasted for about two years until the Supreme Court decided that this maneuver was unconstitutional. From there, crypto was allowed back into play and India seemed like it was going to become a leading digital currency hub.
However, it wasn’t long after that the nation stated it was considering a full-on ban of all crypto activity. That meant no trading, no transactions, nothing, and anyone caught in the act could be faced with fines and even prison time. Many investors were worried about the future of the nation, though it was later suggested that the country would consider regulating crypto rather than banning it.
A Slow Start…
A new bill was introduced, and all was set to make Parliament’s discussion table throughout the final quarter of 2021, but it looks like this didn’t happen. Chandra Garg – secretary of the nation’s department of economic affairs – is part of a committee that is designed to examine and study the ways of crypto. In a statement, Garg explained:
The Committee studied the domestic and international scenario including the various initiatives taken by other governments and regulators and analyzed reasons impacting its growth in understanding the trajectory of regulation and development in virtual currencies. The task of putting together the key issues, global experiences, and challenges faced by industry and policy options thereon, developing the rationale for the final recommendations would not have been possible without the efforts of the members of the Committee and all those who enriched the discussion. The Committee was ably supported by the research work of the macro/finance policy team comprising Aditya Rajput, Anirudh Burman, Ashish Aggarwal, Bhavyaa Sharma, D. Priyadarshini, Jai Vipra, Nelson Chaudhuri, Radhika Pandey, Shivangi Tyagi, and Sumant Prashant at the National Institute of Public Finance and Policy. I appreciate and acknowledge their contribution to this report.