Crypto Regulatory Framework Ready In July – India’s Economic Affairs Secretary

News, Regulation | June 26, 2018 By:

Subhash Chandra Garg, India’s Economic Affairs Secretary, said that the new regulatory framework for cryptocurrencies is likely to be presented next month.

In an interview with news channel ET Now, Garg, who is heading the committee tasked to determine the future of bitcoin in India, said that they are close to publishing the draft and should be able to “wrap up” everything within the first fortnight of July.

“We are fairly close to developing a kind of template which we think might be in the best interest to our country. We have prepared a kind of draft that we intent to discuss with the committee members in the first week of July,” Garg said. “We actually moved quite a lot in that, what part of this business should be banned, what should be reserved and what not. That kind of lot of detail work has happened and now we should be in a position to wrap that up in the first fortnight of July.”

In his Budget speech in February of this year, India’s Finance Minsiter Arun Jaitley said that the government does not recognize cryptocurrency as legal tender or coin, and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.

Garg said that the Finance Minsiter’s comments does not mean that the government will entirely declare cryptocurrencies as illegal. Garg said that he recognized that some people may still find value in cryptocurrencies and that would require introducing certain regulations so that crypto transactions are legal and transparent. He added that the upcoming regulations would introduce legal requirements for know your customer (KYC) procedures and record keeping for transactions.

The new regulatory framework is expected to bring relief to crypto investors and businesses who have felt the brunt of a banking blockade enforced by the Reserve Bank of India (RBI), the country’s central bank, in April of this year. The controversial RBI policy prohibited all regulated financial institutions from providing services to businesses and individuals dealing in cryptocurrencies. Earlier this month, the central bank admitted that it has done no research before reaching a conclusion on its stance.

A number of local crypto companies filed petitions against the RBI crypto ban that eventually reached the Indian Supreme Court, which barred all high courts from accepting petitions relating to the issue. The SC decided to hear all matters and has scheduled the next hearing on July 20.