Just recently, the Reserve Bank of India (RBI), the country’s central banking body, has issued a rather stern warning towards crypto owners and operations. After a decision to clamp down on crypto operations, shutting down one bank account after another, the RBI may finally be changing its tact.
All wheels seem to be in motion, with the Supreme Court sitting earlier than expected on July 3 to review the ban issued by RBI and officials in Delhi reporting that a regulatory framework is well underway.
A Breather for the Regulatory Industry
The new regulatory framework hasn’t yet made an appearance in public. However, based on a recent announcement made by Subhash Chandra Garg, the Secretary of the Department of Economic Affairs at the Ministry of Finance, the framework may arrive as early as the first half of July.
Garg’s functions in the special committee set-up to address the prevalence of cryptocurrencies has been charged with charting a course for the future of Bitcoin in India. Garg has been quite accommodating on this point, explaining: “We are fairly close to developing a kind of template which we think might be in the best interest of our country. We have prepared a draft which we intend to discuss with the committee members in the first week of July.”
Meanwhile, the Finance Ministry has been trying to explain what parts of the business should be regulated, what should be banned outright, and which features of crypto trading ought to take off in full and receive the complete go-ahead of India’s regulatory authorities and the central bank.
Not Currencies, Assets
Garg is the defacto gateway to understanding how India’s authorities think of cryptocurrencies. In previous statements, Garg has explained that the Indian government percieves Bitcoin and its digital brethren as an asset, and not a currency.
Therefore, any payments tried to be settled with the use of a digital currency are deemed illegal. Even then, however, he remained aware that it’s probably not the attitude individuals have towards Bitcoin, for example, and that sufficient regulation will be needed.
Another sufficiently important development is the decision of the RBI and Indian authorities to make sure that crypto exchanges have a clear legal status. For the time being, they are not regulated and despite a pushback from them in the face of the ban, they may lack the legal purchase to push a successful case through court.
The Supreme Court Steps In
In the lack of firm evidence that cryptocurrencies are pernicious for the economic prosperity, the RBI may be willing to go back on its ban obliging commercial bank to suspend the accounts of individual and businesses operating in cryptocurrencies.
However, the mounting pressure from companies who have been quite happy to step into the light has forced the RBI to partly bulge. Now, the Supreme Court will be sitting on July 3 and examine the ban as well as consider the multiple petitions filed by cryptocurrencies in the country.
Indian business is fighting back a ban that seems to be largely unfair. More importantly, it may be undermining the future success of the country as a digital hotbed.