cryptocurrency law in india

Indian Government Finalizing Cryptocurrency Regulations: RTI Report

In response to a Right to Information (RIT) application filed by a local Indian news outlet, the government of India has confirmed that the regulatory framework for crypto assets is in the process of being finalized.

The Indian government has been working on drafting regulations for the use of cryptocurrency in the nation for quite some time now. The task of developing this framework has been put in the hands of an Inter-Ministerial Committee (IMC) which is headed by the Secretary of the Department of Economic Affairs, Subhash Chandra Garg.

A local news outlet had filed the RTI request back in December, asking the Indian government whether the IMC has submitted the final report to the Finance Ministry. The RTI application also enquired if a ban on Bitcoin has been recommended.

On January 25, 2019, the Government of India finally replied to the RTI, by stating the following:

The report of the committee is under finalization stage, hence, prohibited under section 8(3) of RTI Act, 2005.

As per the government’s response, Section 8 of the Right to Information Act enables it to withhold the data contained in the report. Hence, the government could only explain that the report is in its final stages.

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 thereby develop a suitable crypto regulatory framework.

While there is no formal declaration by the Indian government on the legalization of cryptocurrencies, however, the rumour mill has been churning with several conflicting reports coming from different sources.

In December 2018, a popular news channel had said that it has received information from unnamed sources saying that the IMC has considered cryptocurrencies as illegal in India. Contrarily, another news source had in the same month published an article detailing that the committee is considering legalizing digital assets.

The government has in the past said that the matter of cryptocurrencies is being pursued with caution because there is a need to devise a technically feasible solution in the absence of a globally accepted framework in place.

With the revelation that the report is in its final stages, the crypto community in the world’s sixth largest economy will be hooked to see what the government has to say about trading in cryptocurrencies. The acceptance of cryptos in India is low. We had reported on January 3, 2019, how the police department in the State of Jammu and Kashmir had warned its citizens from investing in cryptocurrencies.