Cryptocurrency has reached new heights this year, thanks to the efforts of stalwarts like billionaire Elon Musk. Musk, the “Technoking of Tesla,” has been the moving force behind the surging price of cryptocurrencies (and also mainly responsible for the recent historic dip, but let’s not get into that). Cryptocurrencies have been going mainstream, with the biggest example of this phenomena coming in the form of Dogecoin. The meme crypto made history after Musk’s SpaceX announced the launch of a lunar mission to be paid entirely by the cryptocurrency set for next year.
The cryptocurrency market has had an usual history in the world’s second largest internet market-India. In 2018, the Reserve Bank of India (RBI) had banned all banks from allowing customers to trade in cryptocurrency, a decision which was overturned in February 2020 following a petition filed by Indian crypto entrepreneurs and technology and internet industry association IAMAI.
Back to 2021, and as the world was busy accepting this new digital, more open mode of investment, India was mulling over a ban of all private cryptocurrencies. A legislation had been proposed to implement that ban a few months ago, but so far, nothing has come out of it. Now, it looks like the government may be ready to change its stance on the matter.
On Wednesday, the regulation of cryptocurrency in India witnessed a significant step as a report from ET came out claiming that a new committee of experts may be formed to study the possibility of regulating cryptocurrency in India. The committee has several avenues to explore – the usage of blockchain for enhancement to technology and how cryptocurrency can become a digital asset instead of a currency, as well as ways to operationalize the digital rupee proposed by the RBI. However, the discussions are still early stage and nothing has been decided for certain.
Former finance secretary Subhash Garg had lead a committee in 2019 and called for a blanket ban on cryptocurrency. Additionally, he had said that blockchain-driven currencies will cease to exist in five years and that cryptocurrency itself was a speculative and risky asset not backed by any government authority. However, it looks like the government’s opinion on the matter may have changed.
According to an official, “There is a view within the government that the recommendations made by the Subhash Garg are outdated and a fresh look is needed at the use of cryptos rather than a total ban,” ET reported.
It was the recommendations of the Garg committee that gave birth to the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which was supposed to be included in the Budget session of Parliament in March. In its current form, the Bill brings omens of woe for cryptocurrency in India as it is expected to criminalize the trading and holding of cryptocurrency assets in the country.
This new committee, if formed, will certainly bring remarks from Finance Minister Nirmala Sitharaman and Minister of State for Finance and Corporate Affairs Anurag Thakur into light, who had declared that the Indian government would be taking a “calibrated” approach in regulating cryptocurrency rather than imposing an outright ban. Thakur is a strong contender to be included in the committee.
