Cryptocurrencies in India legal, regulation in final stages, reveals RTI query

While there is no formal declaration by the Indian government on the legalisation of cryptocurrencies, the response has made it clear the government is planning to regulate them

The Indian government is in the final stages of formulating regulations on cryptocurrencies, according to an RTI response from the Department of Economic Affairs.

The response was with regard to the RTI filed by Coin Crunch India on December 13, 2018, asking whether the panel on cryptocurrency has recommended a ban on Bitcoin and if they have submitted the report to the Ministry of Finance.

“The report of the Committee is in the finalisation stage, hence, prohibited under section 8(3) of RTI Act, 2005,” the ministry said in its response.

Amid rumours that the government may term cryptocurrencies as ‘illegal’ in India, the response suggests that the government is still working on its report.

In December 2018, the Ministry of Finance had explained during a Parliament session that the inter-ministerial committee is tasked with analysing all aspects of crypto assets and is developing a suitable crypto regulatory framework.

The government had set-up a panel in December 2017 headed by Subhash Chandra Garg, Secretary, Department of Economic Affairs, to examine a framework for regulating cryptocurrencies. Other members of the panel include Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi and Reserve Bank of India (RBI) Deputy Governor BP Kanungo.

While there is no formal declaration by the Indian government on the legalisation of cryptocurrencies, the response does not make it clear whether the government is planning to regulate them or not.

The response of the government is ambiguous. It has neither confirms nor denies the rumours. However, as of now, cryptocurrencies are still legal in India unless the government formally says otherwise.

The future of cryptocurrencies in India has been unclear ever since the central bank’s diktat, where it barred regulated entities from dealing with cryptoexchanges. In April 2018, the RBI had effectively banned banks or e-wallets from “dealing with or providing services to any individuals or business entities dealing with or settling virtual currencies.”