The situation in India regarding cryptocurrency is no clearer as we enter the new year. The government and central bank are clearly still very cautious towards the industry and are unlikely to make things easier in the near future.
No Specific Timeline
The Indian government has reportedly issued an update on its progress, or lack of, towards cryptocurrency regulation. Ministers are clearly in no hurry to finalize a timeline for a movement towards clearer regulation and acceptance of digital currencies.
According to Quartz the minister of state for finance told parliament;
“In absence of a globally acceptable solution and the need to devise technically feasible solution, the department is pursuing the matter with due caution. It is difficult to state a specific timeline to come up with clear recommendations,”
With no further clarity the state of the crypto industry in India remains clouded. A committee which includes members from the Ministry of Electronics and Information Technology, the Reserve Bank of India, the Securities and Exchange Board of India, and the Central Board of Direct Taxes has been established to further “study all aspects of cryptocurrencies and crypto-assets including bitcoin.”
The panel was expected to draft a report this month which many hoped would bring about the legitimization of cryptocurrencies in the country. When questioned about the legality of crypto assets the minister added “The government has not recognised cryptocurrencies as legal tender. The issue of permitting trading in cryptocurrencies is currently under examination by an inter-ministerial committee.”
RBI Shelves Digital Currency Plans
The Reserve Bank of India, which has been vehemently anti-crypto, has axed plans to launch its own digital currency according to reports. In April last year it was considering its own Central Bank Digital Currency (CBDC) following a series of crackdowns on exchanges across the country. According to a source who spoke to the Hindu Business Line “The government doesn’t want the digital currency any more. It thinks it is too early to even think about a digital currency,”
The RBI is still citing money laundering and cyber security threats as its primary reasoning for the anti-crypto stance. Most central banks have adopted this policy as it is their job to control and monitor the flow of finances to and from their respective countries.
According to the founder of cyrptocurrency exchange Belfrics, Praveen Kumar, “It is premature for RBI to launch crypto-rupee, as more understanding of the crypto economy need to be achieved. It is a right decision to delay the process and see how the publicly traded peer-to-peer economy is shaping up.”
So it seems that the new year has not been a very happy one for crypto aficionados in India where there is still no progress on adoption and acceptance.