India might finally release the long-awaited regulatory draft on cryptocurrency before the end of the year. This comes in the midst of the current ban placed by the RBI, barring banks from dealing with cryptocurrency exchanges.
Draft Document for Cryptocurrency Regulations
According to Quartz India, the panel on virtual currency set up by the finance ministry is set to release a regulatory draft on virtual currency in December. This new development came to the fore through a counter-affidavit by the ruling government on Monday (November 19th) filed in India’s supreme court. The apex court currently has a case involving local digital currency exchanges challenging the RBI ban.
Part of the counter affidavit reads:
Currently, serious efforts are going on for preparation of the draft report and the draft bill on virtual currencies, use of distributed ledger technology in (the) financial system and framework for digital currency in India.
The counter-affidavit further reveals that the regulatory draft report and the draft bill would spread to members of the inter-ministerial committee (IMC). The IMC, would, in turn, hold a meeting to discuss both drafts, which would be available to the committee members by December.
The counter-affidavit by the government also stated that the panel on digital currency would hold two meetings in December 2018 and January 2019 respectively. These meetings would discuss the report and the draft bill on cryptocurrency.
India’s regulatory draft on virtual currency in December would go a long way in deciding the fate of cryptocurrency exchanges in the country.
Current Cryptocurrency Regulatory Landscape
The government of India has created an unfavorable atmosphere for cryptocurrency exchanges to thrive in the country. The government’s attitude towards the virtual currency industry has sparked outburst from the crypto community, causing some exchange platforms seeking friendlier climes.
Recently, a cryptocurrency panel, chaired by Subhash Chandra Garg, revealed during the FSDC meeting that a blanket ban on virtual currency was imminent. However, experts stated that it was impossible to ban virtual currency in the country. Experts further stated that even if a blanket ban happened, implementation would be difficult.
The country also seized its first Bitcoin ATM installed by Unocoin and arrested two of its co-founders for installing the machine without permission.
The country’s apex bank, the RBI, barred commercial banks from conducting banking services for virtual currency exchanges back in April. This action received a lot of backlash for the cryptocurrency industry, which went ahead to sue the bank. Subsequently, exchanges like Zebpay moved to Malta, a cryptocurrency-friendly country.
Image courtesy of Ethereum World News archives.