For digital asset investors in India, it is nearly party time. Leading news media group, Indian Express, reports that the Government appointed panel may finally recommend legalization of cryptocurrencies, although monitoring and regulation of decentralized assets would be highly stringent.
Sources which Indian Express did not name, have confirmed that the parliamentary panel has held two intermittent meetings on the legal status that has to be accorded to virtual currencies in the Indian context.
Earlier detailed studies by panel members had initially recommended that the virtual currencies should not be used in the country, even as the panel continued further research. Their continued study of regulatory conditions in other countries which permitted the use of digital assets has now finally revealed that many members are of the consensus that cryptocurrencies cannot be dismissed as ‘illegal’ entirely.
Instead, there needs to be a well-structured and stringent framework within which the alternate currencies can be operated. However, the panel members continue to be deep discussions in determining the course of action in the coming days, as they set about drafting policies for the central government to implement eventually.
The panel constitutes inter-disciplinary members with various levels of expertise, exposure to digital economies and adoption in overseas markets. This is second such panel set up by the government to consider the case of use and adoption of alternate digital assets in the financial markets. The first panel, which was also constituted by the government in March 2017 had asked for a complete ban on these assets, as their point of view of these emerging technology-driven currency was specific to scam-tainted digital assets.
However, India has a dynamic technology environment and perhaps boasts of one of the largest technology entrepreneurial activity outside of the US and South East Asia. Ever since Bitcoin arrived in 2008-9, there has been parallel trading activity in India as well. There is a healthy ecosystem with local venture capitalists funding startups in the blockchain space and encouraging trading outfits in popular assets such as Bitcoin, Ethereum and others.
The final nail in the coffin came, with the Central Bank of India coming down heavily on local banks not to support crypto-related bank accounts and their transactions. In fact, there was a major trigger when one of the startup founder members was arrested by the government on the back of the ban issued by the government, last November. This led to countrywide protests and some of the bigger operators in the country heading to overseas exchanges such as Binance.
The industry challenged the ban before the Supreme Court which directed the government to set up a panel and present the policy. If all goes well, the Indian Express report says, the days may not be far before Indians engaged in cryptocurrencies in India as legal transactions.