The Indian crypto censorship battle rumbles on as new reports emerge that the government will now not ban virtual currencies after all but instead codify them as commodities.
Earlier this year the government, via the ministry of finance, set up a committee to examine the country’s cryptocurrency market and on April 5th the Reserve Bank of India (RBI) ordered all local financial institutions to bring their banking relationships with crypto related businesses to an end.
In early July, the Supreme Court of India backed up the reserve bank’s decision effectively banning crypto activity.
This decision was a severe blow to companies operating in the sector and after months of uncertainty, debate and lobbying from big businesses, signs are emerging that the government may now be about to do an u-turn.
Local news channels report that a source with inside knowledge of the government committee’s deliberations say there is no plan to ban cryptos in India just yet. The anonymous source said:
I don’t think anyone is thinking of banning cryptocurrencies altogether. The issue here is about regulating the trade, and we need to know where the money is coming from. Allowing it as a commodity may let us better regulate trade and so that is being looked at.
Regulating this emerging industry is a moving target for all governments and getting a definitive stance from the Indian government has proven even more difficult, however last month, in comment to a TV news channel, Subhash Chandra Garg, secretary in the department of economic affairs and head of the cryptocurrency committee, hinted that categorizing cryptos as commodities might be a way forward.
Trade is not a criminal offence. Most of us trade in various asset classes in the stock market. So how is this (cryptocurrency trading) any different? What has to be in place is a mechanism to be sure that the money used is not illegal money and to track its source is the most important thing.