India Most Likely Won’t Ban Cryptocurrencies, Says An Official
With uncertainty brewing up in India’s cryptocurrency market, there is a hope that India won’t impose a cryptocurrency ban at all. Currently, Bitcoin and other digital currencies don’t have a legal status in the country’s financial economy.
However, in a recent revelation, an anonymous government official who refused to be named has spilled the beans telling Quartz that “I don’t think anyone is really thinking of banning it (cryptocurrencies) altogether. The issue here is about regulating the trade and we need to know where the money is coming from. Allowing it as (a) commodity may let us better regulate trade and so that is being looked at.”
A finance Ministry panel has been setup by the government to study them. The panel includes Ajay Tyagi, chairman of market regulator Securities and Exchange Board of India and BP Kanungo, deputy governor of the Reserve Bank of India (RBI), in addition to other officials. The Quartz report states that the panel could also decide to treat cryptocurrencies as commodities.
R Gandhi, a former RBI deputy governor said that treating Bitcoin and digital currencies like commodities will make clear sense as they are not real currencies. He added: “If these are used to settle transactions, then it acquires the nature of currency. So that is one thing that one needs to be wary of. But if people want to invest in a commodity then that is different, because then we can assume that they are aware of the risks involved.”
Earlier this year in April 2017, India’s central bank issued an order to other regulated banking institutions to cut-off ties with the local cryptocurrency exchanges. The country crypto community and exchange revolted against this stand taking the matter to the court. However, in a hearing last week, the Supreme Court has upheld the decision of the ban for the time being with another date of hearing ahead this month.
Moreover, in the last week of June, Subhash Chandra Garg, joint secretary in the department of economic affairs and head of the cryptocurrency panel, told that the authorities are working towards establishing a regulatory structure for the working on digital currencies, and the framework could be out in a matter of fortnight.
The anonymous official also that one of the important concerns of the committee is to track the investor fund to keep a check and curb illicit activities of money laundering and illegitimate financing.
The official added: “Trade is not a criminal offence. Most of us trade in various asset classes in the stock market. So how is this (cryptocurrency trading) any different? What has to be in place is a mechanism to be sure that the money used is not illegal money, and to track its source is the most important thing.”