Indian regulatory body the Financial Stability and Development Council (FSDC) is considering measures to ban the use of private cryptocurrencies while encouraging distributed ledger technology instead, after a meeting on Thursday.
Mr. SC Garg briefed FSDC Council about the progress in the Inter-disciplinary committee on Crypto "to devise an appropriate legal framework to ban use of private crypto currencies in India".
— Crypto Kanoon (@cryptokanoon) October 31, 2018
Ban On Private Cryptocurrencies
The FDSC’s 19th meeting of the year convened on the subject of global and domestic economics, as well as India’s performance in the financial sector. The Council noted that advancements in fintech cybersecurity had been made, including steps toward a threat response team it named the Computer Emergency Response Team in the Financial Sector (CERT-Fin).
Despite that, the regulator will still move forward with consideration of a crypto ban, stating in the official release:
“The Council also deliberated on the issues and challenges of Crypto Assets/Currency and was briefed about the deliberations in the High-level Committee chaired by the Secretary (Economic Affairs) to devise an appropriate legal framework to ban use of private cryptocurrencies in India and encouraging the use of Distributed Ledger Technology, as announced in the Budget 2018-19.”
India’s finance minister Arun Jaitley attended the meeting, as well as members of the Reserve Bank of India (RBI), the country’s central financial institution. Both have been critical of cryptocurrencies in the past, according to a report by The Next Web.
A Continuing Pattern
This dislike of cryptocurrencies and favorable outlook on blockchain is in keeping with that we’ve seen in the past from India. We reported earlier this month that a new group was just formed to push blockchain projects with India’s government and encourage their development. The chair of that committee, Tina Singh, said blockchain was “undeniably the technology of the future.” Not so for crypto, apparently.
Last week, the first Bitcoin ATM installed in India was seized by Indian authorities, and the founder of the ATM company Unocoin was arrested. RBI had begun a crackdown on all things crypto-related since before the machine was even installed.
India’s supreme court has been pushing the RBI to clarify its stance around cryptocurrencies once and for all and has set a deadline of two weeks for it to do so, according to the Economic Times. The RBI has established a blockchain and cryptocurrency research unit to help meet that deadline.
A crypto crackdown isn’t entirely certain yet, as India is considering other alternatives to a ban, such as specialized taxes for digital assets. A proposal currently under consideration by the Indian government would apply a goods and services tax of 18 percent to cryptocurrency trading.
If that measure is approved, the government could choose to retroactively levy that tax from the date the tax category was first instated: July 1, 2017.
Cover Photo by Ravi Shekhar on Unsplash