- The Reserve Bank of India has denied playing any part in drafting of the bill that bans cryptocurrencies
- The RTI was filed by a lawyer Varun Sethi
- RBI said it had no prior knowledge of the bill
The Crypto scene in India is one big blunder. As previously reported, the economic times published an article which stated that India has setup a committee under Dr. Subhash Garg to study the various use cases of cryptocurrencies and come to a decision as to how the government should tackle it. The news back then circulated that after 1.5 years of setting up discreet committees that were instated to study the various use cases of cryptocurrencies and regulate the possession of crypto assets the government still wants to ban all cryptocurrencies and crypto assets in India by drafting a bill called the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019”.
RBI denies prior knowledge of the Bill
Recently things took a humorous turn when Varun Sethi, a lawyer specializing in blockchain, filed a Right to Information request with the RBI, mentioning the report by the media outlet the Economic Times which suggested that several government departments namely the Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA) have already agreed upon the idea of a complete ban on the “Sale, purchase and issuance of all types of cryptocurrency.”
The bank confirmed that it had no prior knowledge about said bill and that there hasn’t been any communication regarding such a proposed law from the central government and neither have they received a copy of the draft bill. The RTI was filed on the 7th of May and consisted of various questions concerning the central bank’s role in the aforementioned bill as this would shed more light on how the government was planning to handle the cryptocurrency situation. In its reply, the central bank clearly denied having “sent out official communication to other departments for this matter.”
Crypto regulatory status in India still unclear
Sethi further asked whether drafting of such a bill that bans cryptocurrencies is possible without the consent of the Reserve Bank of India, but the bank declined to answer. Last year the Reserve Bank of India passed a circular that forced banks that are conducting business on Indian grounds, to stop dealing with firms that provide services related to cryptocurrencies. Many exchanges shut down or moved business elsewhere after this. So there were early signs that the Indian government wasn’t too keen on implementing the uses of cryptocurrencies even though there were speculations of the government developing their own cryptocurrency called the Laxmi coin. Whether or not the world’s second most populous nation is going to regulate cryptocurrencies is still unclear, but the RTI did shed some light on this matter.