A Supreme Court case has been put on hold pending a report on cryptocurrencies by India’s government expected this December.
According to Quartz India, a counter-affidavit has been filed with the court this November 19th which says:
“Serious efforts are going on for preparation of the draft report and the draft bill on virtual currencies, use of distributed ledger technology in (the) financial system and framework for digital currency in India.
The draft report and bill will be circulated to members of IMC (inter-ministerial committee). Thereafter the next meeting of IMC will be held so that discussion can take place on the draft report and bill. It is expected that the draft report will be placed before the IMC by next month.”
India’s government has been trying to come up with a framework for cryptos since 2017, but “a tug of war” arose after an initial report recommended a “choking-up” of exchanges.
India’s Finance Ministry saw that approach as too harsh, with a new committee thus appointed to have a look again at the crypto space.
In the meantime, India’s Central Bank ordered commercial banks to stop serving crypto exchanges, so seemingly going behind the Finance Ministry.
That diktat has now been challenged in court, but the government has intervened, requesting time to come up with a policy which is now to potentially be published next month.
On the one side, according to earlier reports, is the Central Bank which argues banning cryptos completely might be going too far, but exchanges need to be stopped.
They are apparently against regulating cryptos as they argue that would legitimize them, but those recommendations were seemingly rejected by the Finance Ministry which requested a consideration of the global situation.
The new committee is headed by Subhash Garg, secretary of economic affairs in the finance ministry, working with the central bank and India’s SEC.
What they will come up with is unclear, but if we can make any sense of all this, there appears to be some sort of power struggle between the elected and the bankers.
If India’s politicians give in to the bankers, then that might have constitutional ramifications for it would no longer be Parliament that makes the law in the matter of money (or at least some of them), but the central bank through its ability to order commercial banks to deny services to perfectly legitimate businesses.
Something that in many ways shows why cryptos are popular, especially with the now reduced usage of cash.
If all money becomes digital IoUs owned by banks, then freedom would greatly be reduced as it has been – quite illegitimately in our view – for Indian crypto exchanges.