After years of ambiguity, the Indian government might, at last, reveal a regulatory draft for the cryptocurrency sector in the country before the turn of the year.
A panel tasked by India’s finance ministry to regulatory norms and guidelines for domestic cryptocurrency trading and the blockchain industry is set lay bare its draft next month, according to a Quartz report on Tuesday,
The notable development came to light in a counter-affidavit filed by India’ ruling government in a Supreme Court case which currently sees India’s domestic cryptocurrency exchange industry challenging the banking ban enforced by the central bank earlier this year.
An excerpt from the government’s counter-affidavit reads:
[S]erious efforts are going on for preparation of the draft report and the draft bill on virtual currencies, use of distributed ledger technology in (the) financial system and framework for digital currency in India.
The affidavit goes on to reveal that the draft bill and report will be forwarded to members of the finance ministry’s inter-ministerial committee. Subsequently, the committee will hold a meeting on the drafts which will be made available to its members sometime in December.
First established in early 2017, the country’s finance ministry formed an inter-governmental committee that was tasked to examine global regulatory and legal frameworks for cryptocurrencies. The committee, which includes India’s taxation, budget and economic affairs ministries as well as central bank representatives, has the mandate of suggesting measures to propose a regulatory framework for cryptocurrencies – both in usage and trading – in India.
Chaired by Subash Chandra Garg, the head of the committee and secretary of the Department of Economic Affairs, the panel’s approach to regulation will be revealed at a time when the government is considering a ban on the use of private cryptocurrencies In India.
In a televised interview in June, Garg hinted that the committee had “moved quite a lot” in drafting the regulations despite repeatedly missing deadlines on revealing the drafts.
An ongoing ban enforced by the central bank barring banks from providing services to cryptocurrency exchanges has largely chocked the industry in India. It was no longer “reasonable” to continue operations as a crypto exchange, major trading platform Zebpay said in September while ending its operations before headling to friendlier shores in Malta.