One of the review committees created by India’s finance ministry is weighing the option of creating a set of regulatory guidelines for crypto currencies in India. The panel even suggested launching a potentially government-backed currency within the country. Crypto currencies are currently deemed illegal in India but all of that may change in the near future.
Source-based reports indicated that the Indian Finance ministry panel is inching closer to formulating their own state-backed digital asset. This report comes close on the heels of UAE too looking at formulating their own regulatory framework for crypto currencies. According to some officials dealing with the development, the Indian panel is also considering the option of developing and encouraging their own research in developing a sustainable and meaningful blockchain technology.
But there are some officials that are not very comfortable with the development. The core construct of cryptocurrency is decentralization. These select officials feel that creating a Government sponsored or Government-backed crypto currency will totally defeat the overall purpose of such digital assets in a meaningful way. These are decentralized ledgers, but the moment you have a central Bank controlling or Government supporting it, the decentralization part goes out of the window.
The review panel may also consider amending the existing currency Act in India. According to this Act, possession of crypto currencies is considered illegal in India as of now. As a result of the severe Government crackdown, banks have been banned from undertaking business with any crypto currency exchanges and possession of crypto currencies is a punishable offense in India.
Following these developments, Indian largest and oldest crypto exchange, ZebPay had to close down last September. Though the closure came as a surprise to its 3 million-plus users, the exchange had to shutdown shop citing regulatory issues.
The full report of the crypto currency panel is expected to be released by the end of 2018. How that report will change the framework of crypto dealings in India is yet to be seen. As of now, the expectation is rife with how they can bring about a meaningful alteration in the current regulatory environment.