Will India Finally Release a Regulatory Framework for Crypto Industry?

By Swati Kishore

After a lot of uncertainty, the Indian government is finally expected to release a regulatory draft governing the crypto sector by the end of this year. According a report published by the online news website Quartz on Tuesday November 20, 218, the panel tasked with the responsibility by the Finance Ministry is going to release the first draft by December 2018.

The development was noted after India’s ruling government party filed counter affidavit in the Supreme Court. As per the affidavit, the Indian subcontinent’s crypto exchange industry is putting a question on the banking ban which was put forward by the Reserve Bank of India early in 2018.

The government’s counter affidavit read as follows:

“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.”

Furthermore, the affidavit illustrates that the draft bill as well as the report will both be forwarded to the inter ministerial committee of the Finance Ministry. The committee will consequently organise a meeting concerning the draft, and the draft will subsequently be released to the members of the committee.

The Finance Ministry of India had established the committee in early 2017 as a way to examine and establish a framework for cryptocurrency regulations in the country. The committee consists of representatives from the central bank, as well as the budget and economic affairs ministries. It is tasked with suggesting an appropriate framework that regulates both the usage of the cryptocurrency as well as its trading. The head of the committee is Subhash Chandra Garg who is also the secretary of the Department of Economic  Affairs.

The panel will be releasing its draft for the regulation of the crypto market amid concerns of a wide cryptocurrency ban in India. Back in June, Garg had said in a television interview that the committee had made a lot of progress in drafting the regulatory framework. The ban by the Reserve Bank of India that prohibits banks from dealing with crypto exchanges has chocked the Indian cryptocurrency industry. In fact, some of the major crypto exchange players in the market like Zebpay had moved their operations out of the country.