India's Regulators May Soon Release Draft on Crypto Regulations, Local Sources Report

The government of India is reportedly planning to finalize a regulatory framework for digital currencies - which was submitted earlier by a inter-ministerial committee (IMC).

Inter-Ministerial Committee Tasked With Drafting Regulatory Guidelines

In response to a Right to Information (RTI) filing by a local news outlet, the Indian government confirmed it has been working on drafting cryptocurrency regulations for quite some time. Subhash Chandra Garg, the secretary of India’s economic affairs department, had said the IMC had been appointed to prepare regulatory guidelines for cryptoassets.

Coin Crunch India released an update on IMC’s progress, noting that a draft of the crypto regulations was in its “finalization stage.” Coin Crunch had reportedly filed a RTI with India’s Economic Affairs department on December 13th, 2018. The request from the news publication had asked for clarification regarding whether the crypto regulatory framework was being reviewed by the India’s Ministry of Finance.

The Economic Affairs department was also requested to provide information on whether bitcoin (BTC) and other cryptocurrencies would be considered legal tender. In order to gain a better understanding of how digital assets will be regulated in India, the local news outlet had asked for a copy of the drafted regulatory guidelines.

Ministry Of Finance Confirms Regulations Are Being Finalized

In response to the inquiry, the Indian government issued a brief statement: 

The report of the committee is under finalization stage, hence, prohibited under section 8(3) of RTI Act, 2005.

The news publication confirmed that “Section 8 of the RTI act allows an entity to withhold the data in certain circumstances.”

In December 2018, India’s Ministry of Finance had stated that the IMC had been tasked with “studying study all aspects of cryptocurrencies and crypto-assets including bitcoin.” The committee was also “working to develop a framework for regulating cryptocurrencies,” according to India’s finance ministry.

Although Garg had mentioned last year that the IMC was planning to publish a report in July 2018, the final draft of the crypto regulations has not yet been released.

Conflicting Reports About Crypto Regulation

Last month, there were unconfirmed reports from CNBC TV18 that the IMC had recommended treating digital currencies as illegal. However, the New Indian Express reported in December 2018 that the committee may have requested the nation’s government to legalize cryptocurrency-related transactions “with strong riders.”

It appears that India’s regulators may still not be prepared to introduce comprehensive cryptoasset regulations as a recent statement from the finance ministry explained:

In absence of a globally acceptable solution and the need to devise [a] technically feasible solution, the department is pursuing the matter with due caution. It is difficult to state a specific timeline to come up with clear recommendations.