Following widespread reports of the upcoming Indian cryptocurrency bill, the crypto community has started a petition for the government to quickly implement a regulatory framework for cryptocurrencies. In addition, a television network operated by the Upper House of the Indian Parliament has aired a program discussing the bill, and three Right to Information requests have been filed seeking answers about the bill.
Petition to Accelerate Crypto Regulation
Since details of India’s “Banning of Cryptocurrency & Regulation of Official Digital Currency Bill 2019” have emerged, there have been constant discussions about this bill, what it entails, and whether it is the bill that will be submitted to the finance minister. While two prominent local publications have claimed to possess information about the bill, many unanswered questions remain.
In an effort to stop speculation and FUD (fear, uncertainty, and doubt), Blockchain Lawyer founder Varun Sethi started a petition on Change.org on June 15 to the Department of Economic Affairs and the country’s central bank, the Reserve Bank of India (RBI). Anyone can sign the petition entitled “Implementing Regulatory Framework for Cryptoassets in India” and possibly help shape the crypto regulation in the country. At press time, 1,437 have signed the petition.
“This petition is neither sponsored by any specific blockchain or cryptoasset company / exchange / group in any manner whatsoever nor has any compensation being received from anyone to initiate such petition,” the petition reads:
The purpose of this petition is to engage the blockchain community and the government in a more democratic and engaging environment to accelerate the implementation of regulatory framework regarding blockchain and cryptoassets in India and relinquish the ambiguity which has developed around it.
“India is home to 2.7 million tech developers which is expected to grow to 5.2 million in [the] next 48 months,” Sethi began. He referenced the banking restriction imposed by the central bank in April last year as well as the Right to Information (RTI) request he filed, which revealed that the RBI did not do any research before implementing the banking ban on crypto businesses.
Sethi also outlined other countries’ crypto regulatory efforts such as Japan, Malta, Canada, Estonia, Germany, and Norway, “to better regulate and tap the potential of this technology.” The lawyer proceeded to make some suggestions for India such as officially defining terms like blockchain and crypto assets, providing a regulatory sandbox for new crypto assets to be tested in, registering initial coin offerings, defining KYC/AML guidelines, and updating the Foreign Exchange Management Act and the Income Tax Act to report crypto income. He concluded:
The success of the petition shall be when the government issues guidelines for a democratic regulatory framework for blockchain and cryptoassets entities in India, perhaps on the suggestions stated above.
India’s cryptocurrency bill was drafted by an interministerial committee headed by Finance Secretary Subhash Chandra Garg, former Secretary of the Department of Economic Affairs. The committee was tasked with studying all aspects of cryptocurrency and making recommendations for its legal framework. Garg recently said that the report containing the regulatory framework for cryptocurrency was ready to be submitted to the finance minister.
Parliament TV Discusses the Ban Proposal
As speculation rises about what India’s cryptocurrency bill contains, Rajya Sabha TV (RSTV), a television network channel owned and operated by Rajya Sabha, the Upper House of the Parliament of India, aired its latest episode of Policy Watch Friday on the government’s decision to propose a ban on cryptocurrency. Policy Watch is a weekly show featuring discussions of national economic policies. Guests on the Friday episode included Mohd. Haleem Khan, a former secretary, Ministry of Finance.
In the show, Khan explained to anchor Kriti Mishra:
The issuance of currencies is a sovereign act … any currencies issued by anybody else comes to that level of counterfeit currency.
Mishra asked Khan about the 10-year jail sentence for “Whoever directly or indirectly mines, generates, holds, sells, deals in, transfers, disposes of or issues cryptocurrency or any combination thereof,” which according to Bloombergquint, “shall be punishable with fine as may be prescribed by the central government in the first schedule or with imprisonment which shall not be less than one year but which may extend up to ten years, or both.”
Khan described that there is a provision even today for a 10-year prison sentence for counterfeiting currencies. He further explained that another law that comes into play is the Foreign Exchange Management Act (FEMA) before concluding: “I don’t find anything wrong with this approach.”
Nischal Shetty, CEO of local crypto exchange Wazirx, commented on the Policy Watch episode:
If you hear the anchor, she’s reading out exact word to word from Bloomberg article … So let’s not assume this is confirmation.
India’s cryptocurrency bill will first need to be submitted to the finance minister for approval and introduced in Lok Sabha, the Lower House of Parliament. If approved, the bill will move to the Upper House of Parliament. Even if it’s signed into law, anyone can still go to court and challenge the constitutional validity of the law.
3 Confusing RTI Replies
At least three recent RTI requests have been filed regarding the bill to ban cryptocurrency: one with the Department of Economic Affairs, one with the central bank, and one with the Insurance Regulatory and Development Authority (IRDA).
The first of the three was filed by the founder of local news outlet Coin Crunch India on April 26, one day after the Economic Times published its article on the bill. “On May 20, 2019, DEA rejected the RTI application citing ‘Section 8(1)(i)’ as the reason for rejection,” the publication shared, adding that “This could mean that DEA simply rejected it because eventually the information has to be made public.”
The second RTI, filed by Sethi, reveals some interesting facts such as how the central bank did not have any knowledge of this bill and did not propose a ban on cryptocurrency. “RBI has actually stated that they have not received any communication from any department and they have also not given any communication to any government department pertaining to [the] drafting of this bill and this is very surprising,” Sethi explained. The third RTI was filed by a journalist at Crypto News India. The IRDA’s reply was short and swift; it says no information was available on the matter.
With so much speculation and misinformation floating around the cryptosphere, the crypto community is awaiting the government to make an official announcement regarding the bill. Further, the supreme court is expected to address India’s regulatory framework for cryptocurrency and the banking restriction on July 23.
What do you think of this petition? Will you sign it? Let us know in the comments section below.
Images courtesy of Shutterstock, RSTV, Change.org, and Varun Sethi.