Indian Law Commission Sees Cryptocurrencies as an “Electronic Means of Payment”

  • The law commission of India recently revealed it sees cryptocurrencies as an "electronic means of payment."
  • This in a report on sports betting, an activity that has been banned in the country, leading to an underground economy.
  • Some analysts draw parallels between the sports betting ban and the central bank's banking embargo on cryptos.

The law commission of India, an organization established by the country’s government, recently recognized cryptocurrencies like bitcoin as an “electronic means of payment,” according to a recently released report.

The report, titled “Legal Framework: Gambling and Sports Betting including Cricket in India,” saw the organization, ordered by the Reserve Bank of India (RBI), the country’s central bank, to examine whether sports betting should be legalized, reads:

Gambling transactions should be made cashless, making use of electronic means of payment such as credit cards, debit cards, net-banking, virtual currencies (VC, or cryptocurrency), etc.

Law Commission of India

India’s sports betting scene has been embroiled in controversy. Reports suggest an attempt to criminalize it didn’t act as a deterrent, and that a blanket ban only led to an underground economy, in which bad actors reigned.

In 2013, sports betting was thrown into turmoil in the country, as the country’s most-watched sport event, the Indian Premier League (IPL) cricket tournament, reportedly had its matches fixed. This led to a series of high-profile arrests, including those of athletes, for collusion with bookies.

Speaking to Quartz Nischal Shetty, the founder and CEO of a cryptocurrency exchange, revealed this is the first time a “body appointed by the government has given recognition to virtual currencies that they have value and can be used for a transaction.”

Tusha Joshi, an associate at legal firm TRA Law, which represents several crypto exchanges, stated:

The law commission recommends that regulating gambling is preferable to an outright ban. This is the same argument we are making in context of cryptocurrencies.

Tusha Joshi

The law commission noted that cryptocurrencies have made gambling easier, since they make transactions harder to trace. Regulating cryptocurrencies could be positive for Indian crypto enthusiasts, as the Reserve Bank of India earlier this year ordered local financial institutions to bring their banking relationships with cryptocurrency-related businesses to an end.

In July, the country’s Supreme Court backed its decision, effectively banning crypto activity. A petition to reverse the move got over 22,000 signatures, but the ban went forward, dealing a big blow to the country’s crypto scene.

Despite these developments, as CryptoGlobe covered, the Reserve Bank of India recently pushed the Supreme Court for regulations on cryptocurrencies. It reasoned these are necessary as cryptocurrencies encourage “illegal transactions.”

The RBI’s moves against cryptocurrencies have rallied up the crypto community, to the point eccentric cybersecurity pioneer John McAfee asked it to “stand together and act” against the central bank.