Some time ago Western media were shocked by the news about the planned ban on cryptocurrencies in India. The parliament received a draft law aiming to eliminate the trade of cryptocurrency in the whole country, including up to ten years of jail for owning Bitcoin. In exchange, development of a new, entirely Indian cryptocurrency was proposed, with the working title of “Digital Rupee”.
However, the two projects – both the trading ban and the “Digital Rupee” – were quietly rejected. The planned government budget for the years 2019-2020, presented by the finance minister Diai Nirmala Sitharaman did not include any mention of regulating cryptocurrencies. This was commonly considered as a good sign.
Why was India afraid of cryptocurrencies?
The Indian government was dealing with an issue of money laundering through cryptocurrency transaction for a long time now. Over a hundred criminal organizations used this method in India. Moreover, since cryptocurrencies aren’t governed by central banks, it’s hard to monitor their flow.
The aversion towards cryptocurrencies hides a fear of introducing a wide-scale alternative means of payment, that would be unregulated, and thus unpredictable, which could lead to even bigger money laundering problem. All this could lead to the expansion of the grey area and depleting the country’s budget.
Alternative to a ban? Regulation.
During the last G20 summit, India finally confirmed the beginning of working on regulating the cryptocurrencies, finally letting go of the idea to criminalize ownership. Allegedly, the works to regulate the status of cryptocurrencies have been going on since the beginning of 2018 under the supervision of inter-ministerial commission, lead by the Secretary of Finance, Subhash Chandra Garg, but it’s difficult to say when a concrete draft will be presented.
What can you expect from the new regulations? Certainly not cementing Bitcoin’s status as a payment method – Arun Jaitley, the ex-minister of finance, who played a big role with this project, opposed it until his death on the 24th of August.
The new minister of finance, Nirmala Sitharaman, presented the first draft of the project in August, calling it “futuristic and innovative”. In fact, it is rather conservative, including – among other things – restricted access for private individuals.
Some time ago Western media were shocked by the news about the planned ban on cryptocurrencies in India. The parliament received a draft law aiming to eliminate the trade of cryptocurrency in the whole country, including up to ten years of jail for owning Bitcoin. In exchange, development of a new, entirely Indian cryptocurrency was proposed, with the working title of “Digital Rupee”.
However, the two projects – both the trading ban and the “Digital Rupee” – were quietly rejected. The planned government budget for the years 2019-2020, presented by the finance minister Diai Nirmala Sitharaman did not include any mention of regulating cryptocurrencies. This was commonly considered as a good sign.
Why was India afraid of cryptocurrencies?
The Indian government was dealing with an issue of money laundering through cryptocurrency transaction for a long time now. Over a hundred criminal organizations used this method in India. Moreover, since cryptocurrencies aren’t governed by central banks, it’s hard to monitor their flow.
The aversion towards cryptocurrencies hides a fear of introducing a wide-scale alternative means of payment, that would be unregulated, and thus unpredictable, which could lead to even bigger money laundering problem. All this could lead to the expansion of the grey area and depleting the country’s budget.
Alternative to a ban? Regulation.
During the last G20 summit, India finally confirmed the beginning of working on regulating the cryptocurrencies, finally letting go of the idea to criminalize ownership. Allegedly, the works to regulate the status of cryptocurrencies have been going on since the beginning of 2018 under the supervision of inter-ministerial commission, lead by the Secretary of Finance, Subhash Chandra Garg, but it’s difficult to say when a concrete draft will be presented.
What can you expect from the new regulations? Certainly not cementing Bitcoin’s status as a payment method – Arun Jaitley, the ex-minister of finance, who played a big role with this project, opposed it until his death on the 24th of August.
The new minister of finance, Nirmala Sitharaman, presented the first draft of the project in August, calling it “futuristic and innovative”. In fact, it is rather conservative, including – among other things – restricted access for private individuals.
