India’s relationship with cryptocurrency has been a rocky one to say the least. Talk of bans and abolition was rife earlier in the year, and the tone has been largely maintained as 2018 has worn on. However, a recent report suggests that the view of cryptocurrencies in the country may be changing, with there even rumors that it may be legalized with strict conditions attached.
The Indian Bitcoin Freeze
Ever since issuing its first warning about Bitcoin in 2013, the Reserve Bank of India (RBI) has taken a cautious view of cryptocurrencies. It has never outright banned them, but their hardline attitude has sent a pretty stern message to the rest of the world about where India stands. A first interdisciplinary committee meeting was held in 2017 on the subject of cryptocurrencies with the result that Bitcoin was not recognized as legal currency, which prompted more predictions of doom and gloom for Indian crypto fans.
Further negativity towards cryptocurrencies emerged throughout 2017 and 2018, with banks banned from handling assets derived from cryptocurrencies in July this year. This resulted in Indian exchanges such as Zebpay being forced to suspend rupee deposits.
A Thawing in Sentiment?
A second interdisciplinary meeting on crypto was held recently however, with a proposal due by February 2019 to reflect India’s present stance. A senior official who attended the meeting was quoted by a local newspaper as saying:
“We have already had two meetings. There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders. Deliberations are on. We will have more clarity soon.”
This is much more positive language than has ever been used around cryptocurrencies in the country, reflecting a potential softening of stance towards the asset class. This progressive tone may be partly down to the presence in the meeting of RBI executive director Ganesh Kumar and Finance Ministry. Two officials that are part of the G20 and FATF working group meetings on regulating cryptocurrencies, which were outlined earlier in the month. All eyes will therefore be on India in February, as a decision looms regarding the country’s next steps in its relationship with cryptocurrency.