India announced about three weeks ago that new cryptocurrency regulations could be introduced this month. While that still hasn’t happened, there at least appears to be some movement on the front. The panel that was designated to create the standards for crypto regulations, and which was headed by Economic Affairs Secretary Subhash Chandra Garg, has submitted a recommendation that might lead to the development of a completely new legal framework for digital assets.
There has yet to be an official announcement regarding the framework and the details have not been released to the public, leading to only speculation on what it might contain. Given India’s on-again, off-again relationship with cryptocurrencies, even the general nature of the guidance is hard to pinpoint.
The panel has only met one time since being created and isn’t expected to meet again until sometime after the start of the new year. It will reportedly concentrate on discussing the draft of the framework and the provisions of a draft bill for the digital currency space.
A previous task force was created in India to develop a similar framework for crypto. Since then – almost two years later – there hasn’t been much progress and a series number of announcements throughout the period have done little to clarify the country’s stance. This past February, during a budget speech, India’s finance minister stated that the government didn’t recognize crypto as legal tender. That statement was – erroneously – interpreted to mean that the government was calling out digital currencies and led to a crackdown that has crippled the country’s FinTech industry.
Any recommendations will take time to be thoroughly discussed and any subsequent suggestions may never see approval by the government. According to Nischal Shetty, founder of India’s Crowdfire platform and the WazirX crypto exchange, “Even if the government plans to ban possession of cryptocurrency, it will be impossible to implement it.”
Introducing regulations is the best way to ensure that any industry can evolve and mature appropriately. The longer it takes to implement oversight, the more damage can be done. Cryptocurrencies are no longer a “novel concept” that some are “just toying with” – they have already proven themselves to be legitimate alternate forms of currency and need to be treated as such.
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