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The crypto ecosystem in India is evolving and the government, as well as other key stakeholders, have a unifying stance against regulating the space.
The much anticipated Indian crypto bill is facing significant delays as several reports are affirming that the Cabinet under Prime Minister Narendra Modi is contemplating adding changes to the bill. The Indian crypto bill can only be brought up for discussion at the parliament after the Cabinet has given the approval, and this approval is currently being delayed as it was not a part of the agendas at the executive meeting today.
The broader digital currency ecosystem had high expectations that the crypto bill will be heard at the parliament this winter session. However, with one more opportunity for the lawmakers to meet this year (December 23), the chances that the bill will be introduced after deliberation and subsequent decision from the Cabinet are quite low. Once this parliamentary window session is missed, all gaze will now be fixed on the next window which is slated to come around late January to early February.
The crypto ecosystem in India is evolving and the government, as well as other key stakeholders, have a unifying stance against regulating the space. Despite the obvious delays that are being recorded, the government may issue an Ordinance to govern the space if the need arises.
The current crypto bill is expected to define the framework for distributed ledger technology (to record, share and synchronize transactions) and also lay the groundwork for the creation of the official digital currency to be issued by the Reserve Bank of India, which is to be regulated under the RBI Act. According to the local news channel, NDTV, the regulator for crypto will be the Reserve Bank, and crypto-assets are to be regulated by market regulator SEBI.
Violations of whatever guidelines set are notably going to be tagged as a non-bailable offense that can attract up to 18 months in jail and a fine of up to 50 crores.
The Need for Revamp of the Indian Crypto Bill
The Cabinet delays according to sources is because of continuous high-profile consultation that is ongoing. The cabinet wants to adjust and broaden the scope of the Bill and also pattern it to fit global frameworks that are currently hinged on regulating the nascent asset class.
“After several rounds of discussions at the highest levels, it was felt that any legislation surrounding cryptocurrency must be in tandem with a global framework which is still evolving. It might be a better strategy to wait and observe how this space evolves globally,” a senior government official told the Economic Times. “Also, it was felt that the government could consider existing laws and regulations to ensure consumer protection and taxing cryptocurrency transactions in the meantime.”
Prime Minister Modi is also keen on keeping the checks on the digital currency ecosystem active as he said at the virtual Summit for Democracy hosted by US President Joe Biden on December 11.
“We must also jointly shape global norms for emerging technologies like social media and cryptocurrencies so that they are used to empower democracy, not to undermine it,” he said, giving an assurance to the fact that whether now or later, the crypto ecosystem will come definitely come under comprehensive regulation.