Despite mixed developments, a lawmaker in India has confirmed that the country has no cryptocurrency ban.
Anurag Singh Thakur, an Indian member of parliament and the country’s minister of state for finance and corporate affairs, has gone on record to state that the government has not banned crypto assets in any capacity.
India’s Recent Stances on a Cryptocurrency Ban
For the past several months, the crypto asset space in the Republic of India has seen mixed reactions from regulators with government plans for regulating cryptocurrencies unclear. In June 2018, for example, the state-run Reserve Bank of India admitted that it had shut down crypto-related accounts without conducting research into the crypto space or having a complete picture of the space as a whole.
Since then, there has largely been radio silence on the crypto issue, with individual lawmakers occasionally speculating that the currency will be banned or otherwise making abortive efforts to pass firm legislation on Bitcoin. After several months of this shaky policy, the Supreme Court gave the government an ultimatum in February 2019 to formally clarify the nation’s stance on crypto assets moving forward, lest the Supreme Court enact a ruling without input from India’s legislature.
On July 18, 2019, Nischal Shetty, the CEO of an Indian crypto exchange, took to Twitter with a transcript of a hearing on the status on Indian cryptocurrency. When asked by Indian MP Dharmapuri Srinivas, Thakur flatly denied any claims that the government had prohibited any type of cryptocurrency. Thakur further claimed that, “taking note of the issue, the Government has constituted an Inter-Ministerial Committee (IMC) under the Chairmanship of Secretary (EA). The IMC has submitted the Report to the Government.”
Regulation of Cryptocurrency in India Still Tenuous
However, further digging from local media sources in India once again produces a fuzzy picture on the issue. On July 8, 2019, Thakur told Indian media platform Inc42 that “the department is pursuing the matter with due caution,” and that the report was still a work in progress. He added that “it is difficult to state a specific timeline to come up with clear recommendations” in his initial report.
If Thakur and his committee have submitted the report, they would have had to do so in the less than two weeks between his statement to Inc42 and the hearing on July 18. Inc42 claims, however, that its own sources in the Department of Economic Affairs state that “no report has been submitted by the Inter-Ministerial Committee [within] the said timeline.”
The Indian crypto community has reacted with joy that a high-level minister in the Department of Finance and Corporate Affairs has reaffirmed the current legal status of bitcoin within the Republic of India. However, this continued confusion about potential plans for bitcoin’s future has created an undercurrent of unease.
On July 14, 2019, Varun Sethi from blockchainlawyer.in produced what he claims to be a leaked draft of a proposed bill to criminalize the private ownership of crypto assets. The document came from a source working “from within [India’s] Ministry of Finance,” Sethi told Bitcoin Magazine, and it is the early-stage legislation to ban cryptocurrencies that Bloomberg Quint reported on in June.
Sethi stressed that the document cannot legally considered a bill or even the draft of a bill, clarifying that it “looks more like a discussion paper heading towards a bill.”
“It is not a ‘draft bill’ in strict legal sense and would take a long [time] to become an act. Maybe years.”
While there is “no clear ban as of yet,” Sethi said, it is “surely being discussed” and the document is written in the “spirit” of prohibition. It also makes vague plans about a “Digital Rupee” stablecoin to be implemented by the Indian state in the future, as the only way Indian citizens could legally hold any form of crypto asset.