Indian Lawmakers Settle For Crypto Regulation After Admitting That It Can’t be Stopped

In a recent meeting that discussed crypto-related issues amongst India’s parliamentary standing committee on finance, lawmakers concluded that it would be impossible for authorities to completely stop the growth of crypto in India. Instead, the lawmakers agreed that the sector must be regulated. 

The meeting was held on November 15 and was entitled “CryptoFinance: Opportunities and Challenges”. During the meeting, Indian MPs met with representatives from major crypto exchanges along with the Blockchain and Crypto Assets Council (BACC) and other industry insiders for the first time. The events were later reported by Quartz India. 

The New Indian Express also commented on the meeting saying, “The participants largely […] agreed that there cannot be a blanket ban. But many concerns were raised and everyone agreed on the need to regulate it.” 

The meeting on Monday made a clear conclusion that regulation is necessary; however, speculation still exists over who will carry it out. 

The meeting commenced shortly after India’s Prime Minister Narendra Modi led a review meeting that was devoted to cryptocurrencies. In the meeting, the Prime Minister indicated a U-turn on the cabinet’s previously hawkish approach to crypto. 

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Instead, government sources have vowed that progressive and “forward thinking” steps are in the pipeline for crypto regulation. Previously, the industry has asked Indian Authorities to treat cryptocurrencies as special class assets that would be subject to the county’s income tax as well as the goods and services tax. 

National spokesperson on Economic Affairs for the ruling Bharatiya Party, Gopal Krishna Agarwal, has said that cryptocurrency’s legal status in the country and previous fears of a complete ban were fueled by policies that were adopted by the Reserve Bank of India, the county’s central bank. 

The spokesperson said, “In the past, RBI did come out with a circular where it wanted the banks to completely ban people holding cryptocurrencies. But then it was asked to be withdrawn by the Supreme Court and RBI later on withdrew it. The finance minister also said that, “at present we are not looking into banning the cryptocurrency, there are concerns,” adding “But ultimately these concerns etc. will be checked and controlled by regulating it.”

India’s former Finance Secretary agreed with the need for regulation saying that, “we should bring a law which is on the line, maybe better to suit the specific characteristics of this, like we brought in earlier the Securities Contract Regulation Act.” For crypto contracts or crypto assets regulation, he added, “we can bring in some law where the appropriate regulations can be enacted. I think that is the way forward, but it will be very necessary to keep the various facets of it separate.”

The latest development in the parliamentary stance on cryptocurrencies signals the potential shape of the crypto legislation which observers expect to be developed during the winter. The developments are expected to begin on November 29.