India Reverses Stance on Crypto and Plans New Regulatory Regime

  • Uturn for India’s stand on crypto
  • Lobbying by crypto industry forges new rules
  • New crypto rules could come as early as July

Subhash Chandra Garg, Secretary of India’s Department of Economic Affairs (DEA) at the Ministry of Finance, has told reporters this week that draft regulations have been put together for a framework for the use of digital currencies.

Indian authorities have been undecided about the future of cryptocurrencies, and these long-awaited regulations follow the country’s Supreme Court decision to review a petition against the Reserve Bank of India’s (RBI) ban on crypto earlier this year.

In his budget speech in February, Finance Minister Arun Jaitley announced that cryptocurrencies are not legal tender in India and promised that the government would crack down on their use. Since then, the Income Tax Department has issued notices to thousands of crypto investors accusing them of tax evasion. For its part, the RBI ordered all regulated financial institutions to stop all services to businesses and individuals dealing in cryptocurrencies.

Many companies stepped up to challenge the ruling calling it arbitrary, unfair and unconstitutional. Protests by the country’s crypto community have put pressure on the government to reverse their ruling as many believe that the central bank did not provide any reasons for the imposed restrictions.

While 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, it now recognizes that some people may still find value in cryptocurrencies and will introduce regulations so that crypto transactions are legal and transparent.

Garg also indicated that the new rules would introduce regulation for exchanges in India and implement legal requirements for know your customer (KYC) procedures and record keeping for transactions.

The Supreme Court is scheduled to hear petitions against restrictions imposed on cryptocurrencies by Reserve Bank of India, on July 3 and the new regulatory framework for cryptocurrencies is likely to be presented in the first half of July.

Rwanda’s Central Bank Reportedly Considering Launcing Its Own Cryptocurrency

Michael LaVere
  • The National Bank of Rwanda is considering developing a digital currency. 
  • Planning to use Canada, Singapore and the Netherlands as model countries. 

The National Bank of Rwanda (NBR) is reportedly considering the development and launch of a state-backed cryptocurrency. 

Rwandan Digital Currency

According to a report by Bloomberg published on Aug. 22, the central bank is looking into the feasibility of launching a cryptocurrency that would make processing transactions more efficient in addition to boosting economic growth. 

The report claims that the NBR intends to learn from the experience of Canada, Singapore and the Netherlands--other countries that have tested the use of blockchain technology backing a central bank digital currency. 

Financial Stability Director-General Peace Masozera Uwase told Bloomberg in an interview, 

There are still concerns about how exactly you convert the entire currency into digital form, how to distribute that and how fast can you process those transactions. Challenges come in, if technology is down how do you deal with such issues? “We will join in once we are ready.

Rwanda’s consideration of a digital currency comes just weeks after it was reported that China’s central bank digital currency is set for launch, despite the country’s negative stance towards bitcoin and cryptoassets. 

However, the global attitude of central banks is gradually shifting towards the issuance of a digital currency, as existing financial systems seek to find ways to keep up with the fintech revolution being generated through crypto and blockchain.