The latest meeting – that had India’s parliamentary standing committee on finance discussing crypto-related issues with the industry’s representatives for the first time – saw the lawmakers concluding that it was impossible for the authorities to stop the crypto sector’s growth in the country, but also that cryptocurrencies need to be regulated.
During the meeting held on November 15, entitled ‘CryptoFinance: Opportunities and Challenges’, Indian MPs met with representatives of major exchanges, the Blockchain and Crypto Assets Council (BACC), and other industry insiders for the first time ever, as reported by Quartz India.
The participants “largely […] agreed that there cannot be a blanket ban. But many concerns were raised and everyone agreed on the need to regulate it,” The New Indian Express reported, citing a present at the meeting.
And while the Monday meeting’s conclusion was that a regulation was necessary, what is less clear is – who is going to do it?
“But there were many queries which remained unanswered. The most important was if regulated, who will be the regulator of the sector which is neither currency nor traditional trade, not just technology,” the source reportedly said.
The session took place shortly after India’s Prime Minister Narendra Modi led a review meeting devoted to cryptocurrencies, indicating a U-turn on the cabinet’s previously hawkish approach to crypto, per Bloomberg.
Government sources have vowed that “progressive” and “forward looking” steps would be made in the field of crypto regulation as the industry asked for the Indian authorities to treat cryptocurrencies as special class assets subject to the country’s income tax and the goods and services tax (GST), according to the information obtained by local broadcaster CNBCTV18.
Gopal Krishna Agarwal, National Spokesperson on Economic Affairs for the ruling Bharatiya Janata Party (BJP), said that crypto’s legal status in India and fears over a potential ban were in the past fueled by the policies adopted by the Reserve Bank of India (RBI), the country’s central bank.
“In the past, RBI did come out with a circular where it wanted the banks to completely ban people holding cryptocurrencies. But then it was asked to be withdrawn by the Supreme Court and RBI later on withdrew it. The finance minister also said that, at present we are not looking into banning the cryptocurrency, there are concerns,” he said. “But ultimately these concerns etc. will be checked and controlled by regulating it.”
Subhash Chandra Garg, India’s former finance secretary, said that he believed “we should bring a law which is on the line, maybe better to suit the specific characteristic of this, like we brought in earlier the Securities Contract Regulation Act.” For crypto contracts or crypto assets regulation, he added, “we can bring in some law where the appropriate regulations can be enacted. I think, that is the way forward, but it will be very necessary to keep the various facets of it separate.”
Meanwhile, the parliamentary committee’s stance on cryptocurrencies and the need for more regulation instead of a ban signals the potential shape of the crypto legislation which local observers expect to be developed during the legislature’s winter session. The session is scheduled to begin on November 29.