No timeline for regulations, India’s cryptotraders cap 2018 with more bad news

Under fire.
Under fire.
Image: Reuters/Dado Ruvic/Illustration
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If India’s battered cryptocurrency ecosystem expected regulatory clarity anytime soon, then it is set for disappointment.

The Indian parliament was informed last week that the government is in no hurry to finalise any norms or to even set a deadline for the task.

“In absence of a globally acceptable solution and the need to devise technically feasible solution, the department is pursuing the matter with due caution. It is difficult to state a specific timeline to come up with clear recommendations,” Pon Radhakrishnan, the minister of state for finance, told the Lok Sabha, the lower house, on Dec. 28.

Radhakrishnan was replying to a question from a fellow parliamentarian.

Clearly, the Narendra Modi government is in no mood to provide any respite to investors or cryptocurrency exchanges.

The government had formed a committee in November 2017 to study and suggest rules on virtual currencies. This panel was expected to submit a draft report to its own members on bitcoin and its ilk this month. The findings of this report were to be discussed in the upcoming meeting in January 2019.

In March 2017, the government had constituted a task force on the same issue but its findings were not published.

No clarity

The industry has been ruing the absence of a clear set of regulations which has kept investors at bay. The mixed signals from the government have only made matters worse.

For instance, a statement in October from the government suggested that they are looking at banning the use of cryptocurrencies in India. However, the legal documents submitted in November revealed that the government is still trying to choose between a ban or regulations.

Meanwhile, the Reserve Bank of India (RBI) has stifled the industry, prohibiting banks from dealing with virtual currency exchanges and traders. The industry, on its part, has taken the RBI and the other government agencies to the court.

The ecosystem has been pinning its hopes on 2019 and awaiting a clearer set of norms and also for the courts to take a call. It has been a long wait indeed.

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