Is India close to regulate crypto? A draft is expected in December

TL;DR

  • The Indian government has announced that regulations regarding the use of cryptocurrency will be drafted in December 2018
  • This happens following heavy restrictions on banks in regards to providing services for cryptocurrency exchanges and has led businesses, including Zebpay Exchange, to migrate out of India.

India seems to be a step closer to drafting detailed regulations for cryptocurrencies. The draft, that is expected for next month, will include clarifications on how cryptocurrency assets can be traded and: it would address “virtual currencies, use of distributed ledger technology in (the) financial system and framework for digital currency in India.” The revelation was achieved after a counter-affidavits filed by the country’s ruling party at the country’s Supreme Court.

The cryptocurrency industry has been in a state of limbo for the last few months due to a lack of firm regulation, and while nations like Malta (“the blockchain island”) have made cryptocurrencies and blockchain a recognized part of private and government affairs, India seems to have been yet dragging their feet.

India’s long history with cryptocurrency

The relationship between India and the crypto industry has been a complicated one:
Earlier this year, the Reserve Bank of India instructed banks not to have any business affairs with cryptocurrency exchanges. About a month ago, the founders of Unocoin Exchange were arrested in India. There has even been a talk of the government considering a complete ban on private use of cryptocurrency in India.

As a result, there was a significant decline in cryptocurrency businesses in the country, while some migrated: Zebpay, India’s largest cryptocurrency exchange, closed its headquarters in India and moved to operate from Malta.

According to Subhash Chandra Garg, the head of the committee and secretary of the Department of Economic Affairs, meetings will be held between December 2018 and January 2019, with the regulations to be implemented by March 2019.

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