India Drafting New Cryptocurrency Regulations After Controversial (and Unfounded) Banking Ban
An Indian sub-committee tasked with exploring cryptocurrency regulations has drafted a new bill that will be presented to lawmakers next month, one of the nation’s top economic advisers confirmed. The news is the latest positive sign that the world’s fastest growing economy will loosen the clamp on digital currencies after a controversial ban was announced earlier this year.
Draft Crypto Bill Finalized
Department of Economic Affairs secretary Subash Chandra Garg has confirmed that a draft cryptocurrency bill will be presented to government officials in the first week of July.
“We are fairly close to developing a template that we think is in the best interests of the country,” Garg told the nation’s largest financial media outlet in reference to new crypto regulations.
“We’ve actually moved quite a lot [in drafting regulations] in that, what part of the [cryptocurrency] business should be banned, what should be preserved and what not. That kind of detailed work has happened. Now should be in a position to wrap this up in the first fortnight of July.”
As Hacked previously reported, the Indian government has appointed a special panel to evaluate crypto regulations, including the RBI’s recent action. The group has already said it opposes the central bank’s edict preventing regulated financial institutions from serving digital currency exchanges and its users.
Curiously, the RBI has admitted that the blanket ban on digital currency activity was done arbitrarily. This was confirmed by an information request submitted under India’s Right to Information directive.
In that request, New Delhi lawyer Varun Sethi asked the RBI to provide rationale for its decision – namely, whether it conducted research, sought consultation or received recommendation for the banking ban. The central bank answered “no” to all three questions.
Crypto to the Supreme Court
Several Indian firms have challenged the central bank’s ban on grounds that it does not take their views into account. They’ve hired a slew of attorneys who are trying to convince the courts that a blanket ruling on digital currencies is not appropriate given the complexity and diversity of the marketplace.
A Supreme Court hearing on the matter was scheduled for July 20 but has since been expedited to July 3, according to one of the firms challenging the RBI’s edict.
It was previously reported that the High Court was not accepting further petitions against the RBI past the July 20 date. Shortly after the ruling was announced, the High Court of Delhi issued a notice to the central bank and other government agencies that the banking ban was unconstitutional.
India’s digital currency market has bet that trading will survive the central-bank ban, with investors and exchange operators using the three-month window to convert rupees into cryptocurrencies. At the time of writing, the new measures are scheduled to come into force next week after they were announced in early April.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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