Cryptocurrency regulations in India: Modi govt’s conundrum with blockchain & Bitcoin
The regulations for the cryptocurrency ecosystem in India are likely to be finalized by 2018 end. The Indian authorities have been assessing the merits of blockchain and cryptocurrency separately. The central government and Reserve Bank of India (RBI), India’s financial regulator, had earlier sounded affirmative for blockchain technology but showed apprehensions on cryptocurrencies.
The government had constituted a committee in December 2017 to recommend regulations on cryptocurrencies. The panel headed by Subhash Chandra Garg, secretary in Department of Economic Affairs, was to submit the proposal by July but a senior official aware of the developments said it “looks difficult”, according to a Quartz report.
“There are lots of issues that need understanding and lots of studying needs to be done,” the official told the media house on condition of anonymity.
The panel is trying to see if blockchain technology can be given a green signal independently with the regulations. The blockchain is a distributed public ledger, a digital one that can be accessed by anyone on the internet.
“Blockchain is an interesting thing. We definitely want to milk it effectively for financial transactions. So all officials are really trying hard to understand how to separately use blockchain, without cryptocurrency,” the official explained. “And understanding a new software takes time.”
Some of the representatives of India’s cryptocurrency community had also met the government to provide them clear insights about the emerging tech.
“A public blockchain needs to have a token and you can’t have it by excluding cryptocurrencies. Moreover, a public blockchain is analogous to the internet and no one can control it,” said Ajeet Khurana, head of the blockchain and Cryptocurrency Committee, a lobby of bitcoin players in India.
“If a common man is involved in a blockchain that can be used to mine or validate a particular transaction then it takes resources. The investors are then incentivized by paying in cryptocurrencies, so if these digital coins are removed from the equation then it doesn’t make sense,” Shubham Yadav, co-founder of Coindelta, a Pune-based cryptocurrency exchange, told Quartz.
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