The crypto industry in India may soon face big changes as the Indian government is looking to legalize cryptocurrencies.
The New Indian Express revealed in a recent report that a government committee had already met twice regarding the issue and was expected to submit a report to India’s Ministry of Finance next month. According to the report, a general consensus has been established according to which cryptocurrency should not be dismissed as completely illegal and should instead be legalized – strong regulations provided. The committee has also consulted cryptocurrency exchanges and other market experts and is now looking to discuss legal matters with the Ministry of Law.
Declared illegal by recommendation
The inter-ministerial committee was put together last year and is now the second body to focus on crypto regulation in India. The committee was formed after the first panel was established to look into the issue of cryptocurrencies in March 2017. In 2018, the first panel had originally recommended that cryptocurrencies should be banned.
Following the recommendation of the first panel, the Reserve Bank of India decided to declare cryptocurrencies illegal. This led financial institutions in India to stop offering their services to crypto-related companies. The ban was challenged in the Supreme Court, and the government put together the new inter-ministerial committee to revisit the topic.
New board, new luck
The first panel was made up of members from India’s central bank – the Reserve Bank of India – as well as the Ministry of Finance, the Ministry of Home Affairs, the Ministry of Electronics and Information Technology, the National Institution for Transforming India (NITI Aayog), the State Bank of India and the Central Board of Direct Taxes. The new committee contains members from the same bodies, with additional representatives from the Securities and Exchange Board of India.
The ban imposed by the Reserve Bank of India led some cryptocurrency companies in the country to shut down their operations. Cryptocurrency exchange Zebpay is the most popular victim, with the company shutting its doors in September of last year.
Zebpay named the Reserve Bank’s directive as the main reason for their shutdown. They further elaborated that the curb on bank accounts had crippled their ability to transact business meaningfully, making it impossible to conduct the cryptocurrency exchange business.
A new hope?
Reports that the Indian government was set to legalize cryptocurrencies have been around since the end of 2018. These new developments may hint at a brighter future for crypto within the highly populated country.