Indian regulators continue mixed messages over crypto

Don’t hold your breath over regulatory clarity for crypto investors…

While there had been hopes that the Indian regulators were moving towards a relaxation on the restrictions they have placed on cryptocurrencies during the course of 2018, it would appear that there is little by the way of urgency among lawmakers. According to reports, there doesn’t seem to be any chance of potential cryptocurrency investors within the country benefitting from regulatory clarity anytime soon.

Last week we reported on the apparent wish of a government committee in India that crypto-related businesses and transactions be legalised under strong regulations. However, while the conclusion of one ‘senior official’ after that meeting was the region would have “more clarity soon”, subsequent answers to questions in the Indian parliament seem to contradict that upbeat assessment.

The interdisciplinary committee – one of two bodies the country has constituted to look into the cryptocurrency policy of the world’s 7th largest economy –  is due to report its findings early into the new year. Led by secretary of the Department of Economic Affairs, Subhash Chandra Garg, it has tried to explore the potential crypto could hold for the Indian economy. Its own internal report is due to be the subject of its next meeting in January, where the group will also assess the insights gained from discussions at the G20 summit in Buenos Aires. A report for parliament and the wider public could potentially come in February.

However, in response to enquiries regarding a timeline for decision making, finance minister Pon Radhakrishnan has told the country’s ‘lower house’ that “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.”

It’s another twist in a tale that’s offered contradictory narratives throughout 2018, with the country’s politicians and policy makers seemingly blowing both hot-and-cold on the subjects of cryptocurrency and blockchain technology simultaneously. While holding cryptocurrency is not technically illegal in India, it was effectively outlawed earlier in the year when the country’s national bank banned any entity regulated by it from handling cryptocurrency, or the money of cryptocurrency related businesses. This move effectively cut off banking for any crypto-related business in the country, and heavily impaired the ability to turn crypto assets into fiat currency for investors.

However, simultaneously the same body has begun work to create its own digital currency, and sees the technology as a tool for considerable savings over time. The dichotomy appears to come down to a matter of control – with an acceptance of the importance of the underlying tech contrasting against a worry about the far-harder-to-control  nature of truly distributed networks like Bitcoin.