It is expected that the government of India will publish detailed guidelines on the regulation of the cryptocurrency by September, a high-ranking official of the Ministry of Finance said. Consultations with all stakeholders, including the central bank, have already begun. It is reported that this statement is not connected with the Supreme Court hearings on petitions concerning the ban on banking services for crypto-currency companies.
The Government of India has completed the drafting of a regulatory framework for crypto-currencies. On Saturday, New Indian Express reported that the government "is likely to publish recommendations on the regulation of the Crypto-Currency by September." This news follows a statement made last month by the country's economic affairs secretary, Subhash Garg, who claimed that the bill would be ready by mid-July.
Referring to the fact that the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI) and the Association of the Internet and Mobile Communications of India (IAMAI) were included in the list of stakeholders, an unnamed high-ranking official from the Ministry of Finance informed the news agency:
" The project is ready, and before it is finalized, consultations are held with all interested parties. We expect that the bill will be ready by September."
"The Ministry established an interdisciplinary committee chaired by the Special Secretary for Economic Affairs to study the regulatory framework for virtual currencies," the publication reads. "SEBI and RBI have expressed some doubts about the proposals in the original draft."
How to regulate crypto-currencies?
New Indian Express quoted an unnamed high-ranking official who said:
" Crypto-currencies are a new phenomenon, and, of course, governments around the world are faced with the problem of their regulation. Most officials have serious comments on the bill, with which we all agree. We want to reach a common conclusion. There must be an appropriate mechanism to regulate crypto-currencies. "
Although the authorities did not specify exactly how the crypto-currencies will be regulated, the Quartz newspaper reported that a high-ranking government official familiar with this issue noted that they can be regulated as a commodity.
" I do not think that anyone really thinks about a complete ban on cryptocurrency. Here we are talking about the regulation of trade, and we need to know where the money comes from. By resolving crypto-currencies as a commodity, we can better regulate trade, and therefore our views are directed precisely at that, " Quartz said in a July 11 issue.
The official also explained that the crypto-currency "trade is not a criminal offense." He noted:
" What we need to do is to develop a mechanism that will allow us to make sure that the money involved in the trade is not received illegally. We should also be able to trace their origins. "
Fighting crypto-currency companies
The Supreme Court of India originally planned to hold the last hearing on all petitions concerning the Central Bank's ban on banking services for crypto-currency companies on July 20. However, the date of the final hearing was postponed to September 11, as neither the representatives of the Central Bank nor the Securities and Exchange Board was able to prepare convincing arguments in favor of the ban by July 20.
The ban on banking services for companies associated with crypto-currencies was imposed in April. Then RBI announced that regulated financial institutions are prohibited from servicing crypto-exchange exchanges and other related enterprises.
Due to the fact that the final decision on the RBI ban will be made in September, it seems very doubtful that the publication of the regulation in the same month is in no way connected with this event. It is possible that a complete ban on the crypto-currency business will not be imposed, but RBI definitely wants to lay a straw for itself to emerge victorious from litigation. It remains only to hope for the sound mind and sober memory of Indian legislators and the fact that during the drafting of the bill they will also take into account the opinion of the representatives of the crypto-currency community, and not only of state organizations.
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