Business

Paul How

Government panel in favor of lifting India’s crypto ban

The second interdisciplinary committee on cryptocurrencies in India is likely to push for their legalization when it submits its recommendations to the Finance ministry around February 2019.

Thus continues the country’s ever-shifting position on cryptocurrencies, which are currently banned by the Reserve Bank of India (RBI), the country’s central bank, upon recommendations by an earlier government committee back in mid-2017.

The RBI has been taken to court by local cryptocurrency exchanges, and accused of unconstitutionally preventing banks from doing business with them.

According to The New Indian Express, a senior official who attended the recent committee meetings said, “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.”

The unnamed official added, “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 committee is expected to next meet in January. It is headed by Department of Economic Affairs Secretary Subhash Chandra Garg, and includes Revenue Secretary Hasmukh Adhia—who was replaced this month by Ajay Bhushan Pandey—as well as officials from the Securities and Exchange Board of India, the Ministry of Electronics and Information Technology, and the RBI.

The present committee’s more open attitude may have to do with increased awareness of cryptocurrencies and blockchain technology in general over the past year. In addition, members Ganesh Kumar, executive director of the RBI, and Finance ministry officials have participated in the G20 forum and Financial Action Task Force (FATF) working group meetings.

Early this month, the G20 released a joint declaration from its member countries, who agreed to formulate and implement regulations on cryptocurrencies in line with FATF rules, which impose anti-money laundering and know-your-customer requirements on the trade of cryptocurrencies similar to requirements for other financial products.

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