The elections for the seat of power in the largest democracy of the world came to an end on 23rd May 2019. The current ruling political party won the elections again as the people of the nation chose Narendra Modi as their Prime Minister for the second time.
The election in India began on April 11th, 2019, since then India has been under ‘aachar sanhita’ or code of conduct, according to which the Government can pass no new law. Nevertheless, with the election results announced, the pending work of the lawmakers would also resume. Subsequently, cryptocurrency regulations can be expected soon as well.
Winning Party’s Manifesto Includes Blockchain Technology
The manifesto of the ruling party recognized ‘Blockchain Technology’ as a potential tool for development in agriculture and small businesses. According to their declaration,
“Machine Learning, Blockchain technology, Big Data analytics etc. for more predictive and pro table precision agriculture.” It also included, “They will expose MSMEs to Artificial Intelligence, Robotics, Internet of Things, Virtual Reality, BlockChain technology, and Etc.”
Hence, as the political visionaries have recognized the potential of Blockchain, a complete ban on cryptocurrencies would not make sense entirely. The Department of Economic Affairs in India had noted in January 2019, that the cryptocurrency regulations are in its final stages. It said,
“The report of the Committee is in the finalisation stage, hence, prohibited under section 8(3) of RTI Act, 2005,”
Complete Crypto-Ban or Stringent Regulations?
Reportedly, an economic committee under the Indian Government has drafted a bill the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019.” The discussion on the bill is being held between the various branched of the Government. The bill will be introduced in the parliament for approval if sanctioned by the departments.
Evan Luthra, an entrepreneur, and blockchain expert explained the situation of cryptocurrencies in India as,
“While we see a lot of progress happening in India and multiple state governments pressing forward with blockchain and blockchain based solutions, India has also been the leader when it comes to scam projects.”
There have been many dubious Ponzi schemes in India which were able to siphon millions of dollars from investors. Furthermore, Bitcoin and cryptocurrency have also been used for money laundering. The non-regulatory nature of it also gives room for tax evasion.
Nevertheless, a complete ban of cryptocurrencies would also hamper the growth of the FinTech industry with major global players now working directly with Bitcoin or cryptocurrencies. IBM is working with Stellar, while Microsoft with Bitcoin itself. Cryptocurrency is a way of incentivizing the blockchain. Hence, while it maintains an affirmative standard towards blockchain, the Government must allow for legitimate value-based transactions on it as well.
Facebook is also looking to pilot its cryptocurrency project with Whatsapp in India. Reportedly, their project Libra is currently in the development and test phase.
Moreover, the sentiments towards Bitcoin and cryptocurrency from Indian investors are healthy as well. The ban imposed by the Indian Central Bank after 5th July 2018 was put to contest before the Federal Courts. However, the apex court has withheld all proceedings until the Government passes a law.
Do you think that the regulations would be lenient or India will completely ban cryptocurrencies? Please share your views with us.