India to Have Cryptocurrency Regulations in Place by End of March
Statements that help clear the market FUD regarding cryptocurrencies in India
Indian Government Doesn’t Recognize Cryptocurrency as Legal Tender
The Indian finance minister, Arun Jaitley’s budget speech on February 1st, stating that “the government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payments system,” added to the existing FUD (Fear, Uncertainty, and Doubt) in the market for cryptocurrencies, sending major crypto-assets down to bargain levels.
This Added to the Market FUD
Bitcoin (BTC) went below 7000 USD/BTC, Ethereum (ETH) dipped below 700 USD/ETH, and Ripple (XRP) has been steadily marching towards levels last seen in December 2017. The news from India added to the existing pessimism in the cryptocurrency market on account of China’s announcement of blocking foreign crypto exchanges, and the move by major banks such as JP Morgan Chase, Citigroup, and Bank of America from the US and Lloyds Bank from the UK to ban cryptocurrency purchases via their credit cards.
But DoEA Sees Regulations for Cryptocurrencies by the end of This Fiscal Year
However, what largely remained unnoticed and / or given enough weight in the context of India was Jaitley’s assurance that “the government will also explore the use of blockchain technology for ushering in the digital economy”. Also, the Department of Economic Affairs Secretary, Subhash Chandra Garg, has stated that there will be regulations for cryptocurrencies by the end of this fiscal year (March 2018). According to Garg, crypto exchanges in India are currently self-set up and self-regulated. There are no legal or statutory requirements for conducting KYC (Know Your Customer), and there are no records of the transactions. Having regulations in place would help create a trail for every transaction, making the market transparent and more trustworthy.
These Statements Help Clear the air for Cryptocurrency in India
Moreover, Ajeet Khurana, head of the Blockchain and Cryptocurrency Committee (BACC) of Internet and Mobile Association of India (IAMAI) has noted, “It doesn’t mean crypto trading is illegal but comes with its own risks like any other investment asset in the market. Right now, the general understanding of the term Bitcoin in India is vague.”
Even cryptocurrency exchanges aren’t threatened by the finance minister’s comment on cryptocurrency. “The current government is open-minded and this is a welcome change for those developing revolutionary technology,” said Sandeep Goenka, cofounder of Zebpay, one of the earliest and leading cryptocurrency exchanges in India.