India has always been strict when it comes to cryptocurrencies. In fact, there is an outright ban on the use of cryptocurrencies in the country. This hasn’t discouraged people from finding ways to benefit from this emerging market. Recently, the government informed the Supreme Court that it is creating cryptocurrency regulations and would be releasing a draft soon. You see after the government placed a blanket ban on all cryptocurrencies, the Supreme Court received several petitions from stakeholders in the industry. It subsequently gave the government a deadline to create a regulatory draft.
A lawyer, Jaideep Reddy from Nishith Desai Associates, said that the main problem was addressed within little time. According to him, the government needs to settle its negotiations with the Union of India before presenting the draft. He went on to say that after the council hearing, the court suggested that the issue should be delayed by four weeks for the last time. After four weeks, the government is expected to have done everything it wants to do regarding the case and the cryptocurrency paradigm will be heard.
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Reddy said that the petitioners requested that the matter is discussed separately and should not be mixed with discussions about the declaration of cryptocurrencies in India. This was suggested because the RBI, the body that placed the ban, is an independent entity. The counsel pointed out that many the citizens who happen to be employees of exchanges are suffering more as the ban continues and no decision has been made.
The Internet and Mobile Association of India is one of the petitioners who specifically requested that the ban by the RBI be lifted. This body has a lot of cryptocurrency-related business members. They argued that there was no constitutional backing to support the ban. One of the businesses that have suffered the most from this ban according to the association, is Zebpay. Zebpay had to shut down its operations in India because it could not access banking services due to the ban.
Indian Government Works On Creating A Regulatory Framework For Cryptocurrencies
Thanks to the court order, the Indian government is currently working on creating a regulatory framework for cryptocurrencies that would rule out the blanket ban. A panel has been set up to work on it and it is being headed by the secretary of economic affairs Subhash Chandra.
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Reports from a source familiar with the matter are that the panel has already submitted recommendations which are already being finalized by the government. For now, it’s not clear what these regulations would look like. No one knows if the regulations will be favorable to cryptocurrency businesses or not. If they are favorable, more cryptocurrency and blockchain companies will be happy to set roots in India. This will have a ripple effect that will be beneficial to the economy. Otherwise, the development of cryptocurrencies and the underlying blockchain technology in India will be hindered and the country may not fully benefit from it like other countries that are currently exploring it.
Do you think the regulations are going to be favorable to the cryptocurrency apce in India? Share your thoughts in the comment section.