The Indian government previously planned to submit the proposal for crypto regulations in July. However, a senior official has revealed that the regulatory framework for cryptocurrencies in India has been delayed and will likely be ready by the year’s end. Meanwhile, the government is reportedly considering “launching crypto tokens for financial transactions.”
Indian Regulations Delayed
The Indian government has been working on cryptocurrency regulations. A panel was set up in December last year under Subhash Chandra Garg, secretary in the department of economic affairs, to propose crypto regulations in India. The proposal was supposed to be ready in July and the regulations unveiled in September.
However, Quartz reported on Sunday, August 12, that a senior government official familiar with the panel’s discussions indicated that “now that ‘looks difficult’.”
The publication wrote, “India’s cryptocurrency regulations will likely come by end of 2018,” adding:
A finance ministry panel is still evaluating how to treat blockchain and cryptocurrencies separately.
The official explained to the publication that “there are lots of issues that need understanding and lots of studying needs to be done.”
The news outlet elaborated, “the key issue facing the panel is if regulations can be drawn up to push the use of blockchain independently” and quoted the official describing:
Blockchain is an interesting thing. We definitely want to milk it effectively for financial transactions. So all officials are really trying hard to understand how to separately use blockchain, without cryptocurrency…And understanding a new software takes time.
Indian Government’s ‘Crypto Tokens’
On Friday, August 10, DNA India reported that the Indian government “is considering launching crypto tokens for financial transactions in the country, even as the existing ban on cryptocurrencies is likely to continue.”
While “crypto tokens are based on blockchain application,” the news outlet described that unlike cryptocurrencies, a “crypto token is a representation of money. It can’t be used in place of fiat money.”
The panel headed by Garg is also “studying the possibility of using various crypto assets, including cryptocurrency,” a senior official in the finance ministry explained and was quoted saying:
The committee is examining if crypto tokens can be used to replace smart cards such as metro cards in the public sector to start with. Similarly, in the private sector, it can be used in loyalty programmes such as air miles where its use is limited to buying the next ticket and can’t be converted into money.
While admitting that the new technology has a lot of promise, the publication noted that “Garg categorically denied allowing [the] use of cryptocurrency in any manner including in payment systems.”
When do you think India will finally come up with crypto regulations? What do you think of the government considering launching crypto tokens? Let us know in the comments section below.
Images courtesy of Shutterstock and the Indian government.
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