While the Supreme Court is slated to hear on July 3 petitions against restrictions imposed on cryptocurrencies by Reserve Bank of India, Finance Ministry is also expected to come up with new regulatory framework for the digital form of money in the first half of that month, said media reports.
Subhash Chandra Garg, Secretary of the Department of Economic Affairs (DEA) at the Ministry of Finance, told news channel ET Now that a draft has been put together and will be discussed in the first week of next month.
Garg, who is heading the committee tasked to determine the future of Bitcoin in India, explained: “We are fairly close to developing a kind of template which we think might be in the best interest of our country. We have prepared a draft which we intend to discuss with the committee members in the first week of July.”
The DEA secretary said that the committee has made a lot of progress with regard to determining “what part of business should be banned, what should be preserved, and what not.” In his words, the lower detail work has already happened. “We should be in the position to wrap this up in the first fortnight of July,” he said.
In previous comments, Garg said the Indian government “does not read this [cryptocurrency] as currency” and would not allow its use in the country’s payment system. This, he explained, means the executive power “would do something to eliminate” the illegal use of “crypto assets.”
Nevertheless, he recognized that some people may still find value in cryptocurrencies and that would require introducing certain regulations so that crypto transactions are legal and transparent.
Earlier reports that the roles of regulators had been decided and that the new rules were coming soon were not confirmed by concrete actions.
Subhash Garg also noted that cryptocurrency exchanges in India are not regulated and indicated that the upcoming regulations would introduce legal requirements for know your customer (KYC) procedures and record keeping for transactions. In February, he expressed hope that his committee would finalize its recommendations within this financial year. Then, legal changes would have to be made and regulatory responsibilities assigned.
According to media reports, however, the panel headed by Garg is the second body formed to come up with a solution, after the first committee failed to complete the task.
Indian authorities have been sending mixed signals about the future of cryptocurrencies, along with issuing warnings and applying restrictive administrative measures. In his budget speech in February, Finance Minister Arun Jaitley reiterated the official position that cryptocurrencies are not recognized as legal tender and said the government will crack down on their use for illegal activities. Since then, the Income Tax Department has issued notices to thousands of crypto investors accusing them of tax evasion. For its part, the Reserve Bank of India ordered all regulated financial institutions to quit providing services to businesses and individuals dealing in cryptocurrencies. Nevertheless, there are voices within the Indian government that insist Bitcoin has its place in India.
Supreme Court Resets Hearing Date to July 3
The RBI gave commercial banks three months to comply with its directive formally motivated with the need to protect consumers and prevent money laundering. Recently, the central bank admitted it had done no proper research into cryptocurrencies before issuing its circular. In the past few weeks, local exchanges have been preparing for the ban by terminating fiat deposits and withdrawals while launching and expanding crypto-to-crypto trading.
Indian Crypto Regulations Ready in July, Official Reveals
A number of Indian crypto companies filed petitions against the restrictions that eventually reached the Supreme Court, which barred all other courts from accepting new petitions. The hearing was initially set for July 20, two weeks after the RBI comes into effect, on July 5, which triggered protests by the members of the country’s crypto community.
One of the companies that has filed a petition challenging RBI’s measures is the operator of the Indian exchange Coinrecoil, Kali Digital Eco-Systems. Its co-founder and director, Kunal Barchha, told news.Bitcoin.com that the Supreme Court has rescheduled the hearing for an earlier date on request by one of the other petitioners – the Internet and Mobile Association of India (IAMAI). The review is now set to take place on July 3, before the enforcement of the ban. Mr. Barchha also said that Coinrecoil’s lawyer will file a similar request on July 2 and he expects the court to honor it. (Agencies)