The Indian cryptocurrency scene is murky as crypto entities are facing a banking ban and the government has explicitly asked investors to stay away from Bitcoin and other cryptocurrencies.
However, the second interdisciplinary committee is now saying that cryptocurrency could be legalized in India with several terms and conditions, as reported by The New Indian Express.
What Does the Committee Want?
The committee has met twice to discuss digital currencies and will submit its report to the finance ministry in February next year. A senior official who attended the panel’s meeting commented:
“We have already had two meetings. There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders. Deliberations are on. We will have more clarity soon.”
The official added:
“We have also taken inputs from cryptocurrency exchanges and experts and will be examining legal issues with the law ministry. It’s a complicated issue. Once all aspects are decided, then we will have more clarity.”
The first interdisciplinary committee on this issue was set up in March 2017, headed by special secretary Dinesh Sharma.
It included members from the Ministry of Home Affairs, Ministry of Electronics and Information Technology, NITI Aayog, the Reserve Bank of India and CBDT.
This committee recommended a total ban on digital currencies in India with immediate effect.
India’s Changing Crypto Stance
As soon as the first committee’s report was out, the RBI termed cryptocurrency illegal in the country.
The Finance Ministry continued the hawkish stance and the Finance Minister Arun Jaitley also invoked strong sentiments against cryptocurrency during his February 2018 budget speech.
This was followed by a banking ban on crypto entities in the country.
Industry stakeholders challenged the stance in the Supreme Court, and the government set up a second committee led by Subhash Chandra Garg, the Department of Economic Affairs secretary.
It also includes members from Ministry of Electronics and Information Technology, SEBI and the RBI.
India’s changing stance on digital currencies could be inspired by the Financial Action Task Force as well as the G20’s combined efforts to create regulations that could counteract financial terrorist financing and money laundering via cryptos.
Finance ministry officials and RBI executive director Ganesh Kumar have been part of the FATF and G20 working group meetings which highlights why they may want cryptocurrencies to be legalized and regulated in the country.