- Crypto ban has disrupted trading in India
- Cryptocurrency trading is legal but RBI discourages their use
- Crypto exchanges have closed shop and others relocated as a result of banking ban
India’s burgeoning crypto community will soon know the government’s policy on cryptocurrency. The cryptocurrency ban by the Reserve Bank of India (RBI) has disrupted crypto trading so much that most people consider buying or investing in digital currencies a criminal activity.
As per information extracted from the government’s counter-affidavit, according to Quartz , that was filed in the Supreme Court on Monday, November 19, 2018, the Finance Ministry panel set up in November 2017 to look into the matter is likely to deliver their draft within the next one month.
The highest court in the land is hearing a case filed by a conglomeration of cryptocurrency exchanges challenging the ban that has choked the cryptocurrency ecosystem. The government’s task force on cryptocurrency policies is headed by Subhash Chandra Garg, a top civil servant who also serves as the secretary in the department of economic affairs.
The affidavit states that the panel is making serious progress in the draft’s preparation bill for digital currencies and the use of the blockchain technology in the financial systems in India. The affidavit reads in part:
“The draft report and bill will be circulated to members of IMC (inter-ministerial committee). Thereafter the next meeting of IMC will be held so that discussion can take place on the draft report and bill. It is expected that the draft report will be placed before the IMC by next month.”
The Indian Supreme Court asked the government on October 25, 2018, to clarify its position regarding the matter of cryptocurrencies during the hearing of an appeal challenging the Central Bank’s circular prohibiting banks regulated by it from offering banking services to cryptocurrency exchanges.
Cryptocurrency trade in India is not illegal but the Reserve Bank has maintained a negative stance towards them and discouraged their use, even though there is no official ban on trading of cryptocurrencies in India.
The April 2018 ban on bank accounts for businesses and individuals engaged in cryptocurrency trade has caused a serious disruption in the business of India’s cryptocurrency exchanges causing most to stay afloat while others have had to relocate their businesses elsewhere.
The Garg task force will be the government’s second attempt to regulate the cryptocurrency business after the first one that was set in place in March 2017. While it is not yet clear what the panel recommended, its main contention was the protection of investors by choking cryptocurrency exchanges. The crypto community will wait eagerly to know the government’s position on these matters.