The multi-ministerial panel created by India’s Finance Ministry has reportedly recommended that the government take urgent steps to discontinue or discourage the use of cryptocurrencies including Bitcoin in the country. The panel also proposed that the government should regulate any commercial establishments and intermediaries if they continue using the digital currencies.
This would put a great onus on such businesses and likely force them to stop accepting cryptocurrencies. Before making its recommendations, the panel consulted the public, digital currency startups and other stakeholders in the market.
The Indian government’s current position on regulating virtual currencies
The government of India has yet to decide on how to effectively deal with the use of digital currencies in the country. Aside from the panel, however, the government has also created a task force to study the feasibility of regulating the cryptocurrencies while certain states already plan on regulating Blockchain in the public sector.
Meanwhile, the Supreme Court has issued an order to the Reserve Bank of India (RBI) to conduct an investigation on the complaints about its lack of action about virtual currencies. The central bank was given four weeks to issue a report on the matter.
Current state of cryptocurrencies in India
The use of digital currencies, particularly Bitcoin, continues to grow rapidly across India. According to Bangalore-based Bitcoin exchange Unocoin, there were more than 50 new merchants who had accepted Bitcoin as a form of payment in July 2017 alone.
Meanwhile, a recent survey showed that professionals in the majority of industries have already heard about Bitcoin but had not actually used it.
Given these developments, it will be interesting to see if the Indian government follows the panel’s recommendation. If they do, it remains to be seen how this will affect the adoption of cryptocurrencies in India.