The Indian government has been making progress in terms of cryptocurrency regulations despite rumors that cryptos would be banned in the country. A recent report from the Indian Ministry of Finance confirms that some recommendations are being made towards regulating this sector.
Indian government looking to regulate cryptos
Multiple reports from local media outlets reveal that a draft bill on the regulatory framework for cryptocurrencies is being shared amongst relevant government agencies and departments. The country’s Ministry of Finance recently published a summary report detailing government activities last year.
According to the report, the government put together a committee made up of members from different ministries under the leadership of Secretary, Department of Economic Affairs. This committee was tasked to look into everything related to cryptocurrencies and crypto assets, the document explains.
Initially, the government was expected to submit a report containing a regulatory framework for digital currencies to the Supreme Court last month. However, the court adjourned the case without addressing crypto regulation. The next hearing is slated to take place on July 23, and the issue of the legal framework for cryptocurrencies could be by solved.
The report stated that there are various options available for treating cryptocurrencies which include banning and regulating. The committee is studying all these options at the moment.
FATF called in to help
The Indian Department of Revenue is currently working with the FATF (Financial Action Task Force). The two bodies are working on the different aspects of cryptocurrency regulations. The FATF is an international entity that sets standards and promotes the implementation of regulatory framework and operation measures that help fight money laundering, terrorist financing, and other harmful vices.
According to the report “the Department of Revenue has been actively involved in the working papers being developed by the FATF on various issues (such as virtual currency, proliferation financing among) which will act as guidance for the member countries.”
The leading economic countries in the world continue to support FATF as the global anti-money laundering standard-setting organization. The FATF in its recommendations to the G20 stated that each country or region should implement a risk-based approach when dealing with cryptocurrencies, crypto-related activities and service providers in the industry.
The FATF has assured member-states that it is working on updating its “Risk-based Approach Guidance on Virtual Currencies” by the next G20 summit slated to take place in June. The framework would help countries and the private sector to implement regulations for cryptocurrencies and other activities related to them.
Cryptocurrency ban could still happen
A report by a local media outlet, the Economic Times of India, reported a few hours ago that the Indian government is currently discussing the possibility of a drafting a bill to ban cryptocurrencies. The media outlet reviewed the minutes of the meeting amongst government agencies, with representatives from areas like the Central Board of Indirect Taxes and Customs, the Department of Economic Affairs, the Central Board of Direct Taxes, and the Investor Education and Protection Fund Authority.
According to the report, government agencies believe that they have wasted a lot of time in taking action against digital currencies. Thus, there is an urgent need to ban cryptocurrency activities in the country.
The Economic Times cited an unnamed government official who revealed that a draft bill referred to as “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019” is already being shared amongst the different government bodies for discussion. However, the report by the local media outlet didn’t discuss the part where it says that cryptocurrencies could be regulated instead of an outright ban.
The Economic Times concluded that a final law would be drafted and proposed to the next government that emerges after the elections are completed next month.