- India may soon legalize crypto token investment within the country, but definitely not cryptocurrencies.
- India maintains that cryptocurrencies are not “currencies at all” but are similar to “a Ponzi kind of scheme.”
India: On Friday, 10th August 2018, a local news media reported that India is presently considering the legalization of crypto tokens within the country, though the Indian government yet maintains its uncompromising stance on cryptocurrencies.
According to the news source, the finance ministry reportedly set up a committee under the chairmanship of Subhash Chandra Garg, the current secretary of the Department of Economic Affairs (DEA), to work on a set of rules, procedures, and roadmap which will allow some certain crypto tokens to be used in India. Once a draft of the regulations is prepared, it will be presented before the Parliament.
Garg, who heads the committee, stated that:
“The committee is studying the possibility of using cryptocurrencies or crypto technology (distributed ledger technology) for financial transactions and also what kind of regulations are needed for that…[while] the currency is totally banned; the committee is discussing its other usage and how it can be mainstreamed in India.”
Though Gary emphasized the usefulness of the digital ledger technology — blockchain technology — and the lots of promises it offers, he reportedly denied the use of digital currencies in the future for any reason and manner, which include as a payment system.
Garg added that the DEA has released “several advisories” to the general public cautioning them against the risks inherent in investing in cryptocurrencies, stating that cryptocurrencies are not “currencies at all” but are similar to “a Ponzi kind of scheme.”
Before now, cryptona.co reported in April that the Reserve Bank of India (RBI) has stopped all dealings with bank accounts associated with crypto trading, and crypto-related persons and businesses, which took effect in July.
Garg advised the government to “test the waters” when it comes to legalizing the use of crypto tokens, which if introduced would not serve as a substitute for fiat currency:
“One will need to pay physical money to buy a token which could be stored as a code in any basic mobile feature phone. It can even be used for remittances. So, it is easy to implement from technology as well as regulatory point of view. But in case of cryptocurrency, one needs to allow it as a legal tender first.”
The committee would also include an analysis of what it deems would be the likely prospects and consequences of legalizing the crypto tokens by the government.
The judiciary has refused to grant an interim relief to those that were supposedly affected by the RBI’s controversial ban on crypto-related bank accounts. The final hearing which was initially scheduled for Friday, 20th July 2018 has been deferred till September 2018.
An intriguing aspect of this news is the fact that crypto token – cryptocurrency token – is as well a cryptocurrency. India only wants a way to regulate it.