The Reasons Why India Delays New Crypto Regulation
Investors and cryptocurrency holders ask the government to reconsider and not to ban these digital assets.
This winter session of the Indian Parliament will not be banned from the use of cryptocurrencies. This happens because the government stills evaluating the crypto regulation foreseen for that country.
Some months ago, the Indian government told the Supreme Court that the cryptocurrency bill would be introduced during the winter session.
But the crypto bill is not contemplated in the Parliament’s agenda published by Lok Sabha, the Lower House of the Indian Parliament.
The name of the draft bill that the Indian government has been evaluating is “Banning of Cryptocurrency & Regulation of Official Digital Currency Bill 2019”. The initial plan was that the government would discuss the cryptocurrency-related draft.
Last August, the Indian government stated that the draft bill would be introduced in Parliament in the winter session, which will take place from November 18th to December 13th.
This draft legislation contemplates to ban the use of cryptocurrencies in India, but also to introduce a “Digital Rupee” issued by the country’s central bank, the Reserve Bank of India.
In this way, the authorities of the country consider issuing a digital coin but not using cryptocurrencies that already exist. However, the bill does not apply to Bitcoin’s (BTC) underlying technology, blockchain.
The Indian government would use blockchain and related technologies as well as blockchain-based financial applications. This, since that kind of technology, is being used in different fields, in other countries, to store and handle unchanged information.
The Community’s Reaction
Investors and users of cryptocurrencies in India see this delay as something positive for them. Now, they have more time to spend, sell, store and change for fiat money the crypto assets they have.
Sohail Merchant, CEO of the Indian crypto exchange Pocketbits, considers the news a temporary relief to protect the crypto industry in India. As a response, he wrote a message in his official Twitter account.
“Draft bill for banning of crypto is not on the agenda for Parliament winter session. Relief for now, but use this time to come together and present our case to the regulators. Forget competition/ego & echo our thoughts with a single voice”.
Nischal Shetty, CEO of the Wazirx crypto exchange also said that the delay is great news for those who are part of the crypto ecosystem in India. He suggests that the government is taking more time to reevaluate the complete ban of traditional cryptocurrencies.
“Great to see Indian Government not rushing into this. They are listening”, Nischal Shetty said.
Also, he has a social media campaign calling for positive crypto regulation for more than a year. He believes that these assets comprise a key factor in current times. They are also part of the current technology.
Crypto industry investors criticize the draft legislation that intends to ban cryptocurrencies. Last October, Tim Draper, a billionaire venture capitalist called on Prime Minister Narendra Modi to reconsider the negative position of the country on cryptocurrencies. Draper claimed that India was leaving itself vulnerable to corruption by trying to ban crypto assets.
Currently, India is one of the five BRICS countries considering launching a national cryptocurrency to facilitate settlements between member countries. The bill to ban all cryptocurrencies except state-issued ones was drafted by an interministerial committee (IMC) headed by former Secretary of the Department of Economic Affairs, Subhash Chandra Garg.
The draft was submitted to the Ministry of Finance in February and made public in July. Crypto holders did not agree and gathered, the first week of November, at an event known as “Unwind with Crypto”; hosted by local crypto exchange Coindcx.
They hope to build a “stronger global community”, and that Indian authorities consider allowing the use of cryptocurrencies in the territory; however, the answer would be known next year.
By María Rodríguez