In a very interesting development, the Law Commission of India (LCI) in it's report considered cryptocurrencies or virtual currencies on par with other forms of electronic payments such as Credit cards, Debit cards and net banking.
The 21st Law Commission chaired by Justice B.S. Chauhan published its 276th report: “Legal Framework: Gambling and Sports Betting including Cricket in India.” You can find the PDF for the report here
Gambling transactions should be made cashless, making use of electronic means of payment such as credit cards, debit cards, net-banking, Virtual Currencies (VC – also known as Cryptocurrency), etc.
But let's not jump the gun and celebrate. This report doesn't imply that the draft being readied will consider cryptocurrencies on par with electronic forms of payment. That committee is separate to this one.
It's also worth noting here that the Law Commission of India is somewhat toothless as it has no executive powers but only advisory. However, it's recommendations are often considered by the government quite seriously.
Delhi based Mohammed Danish, an advocate practicing with the New Delhi High Court has authored a piece clarifying LCI's stance on the matter here. He's very knowledgable on the subject matter and in my past correspondence with him he has clarified some doubts on the subject.
However the LCI reports makes an error in judgement as well.
The Law Commission of India while discussing the need for regulation of gambling in its report, briefly mentions about the RBI circular dated 6th April 2018 and also the litigation which has followed. It is disappointing to read that the Law Commission which is the apex advisory body of legal experts, has misconstrued the legal status of Crypto Currencies in India and claims that its “use” has been outlawed by RBI in the following words:
“The issue of Online Gambling has further been worsened by the rise in popularity and ease of availability of VC, a form of electronic money. Having taken the form of a parallel economy, gambling with VC, pushes even the Online Gambling market underground, and very often, out of the reach of the law enforcement authorities. The Reserve Bank of India by way of Circular dated 6th April outlawed the use of VC. The circular was challenged by the Internet and Mobile Association of India. The Supreme Court while entertaining the petition refused to grant any interim relief to the petitioner vide Order dated 3 July 2018.”
This certainly reminds us of many such statements that caused FUD in the Indian market notably the budget speech by the Finance Minister.
This is an important development on the matter concerning cryptocurrencies. It's quite likely that we're going to witness further development on this matter in the days to come.
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