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India, the world’s fastest growing economy and second-most populous nation on the planet, continues to offer no true indicator of their final decision about the legality of cryptocurrencies in the country, though a formal ruling is expected soon.
A panel specially formed for the purpose has submitted its report to Finance Minister Arun Jaitley, and CNBC-TV18 reports that sources close to them say that the panel has suggested that cryptocurrencies be banned outright and that new regulation be formed for the space.
The nation’s income tax department concurs with this decision.
Tellingly, however, the panel has said that a new national digital currency may not be out of the question, “considering global circumstances.”
This hints at the possibility that the government may build its own digital currency, rumors of which have been floating around for some time, though whether or not this will come to a full realization is unknowable. India’s attitude towards the cryptocurrency market has remained extremely uncertain for a long time.
The panel has suggested before that punitive measures must be taken for crypto-related operations, saying:
The law should enlist punitive measures that the government and its investigative agencies can take in case it finds anyone or any entity trading or dealing/ holding it.
It is not necessarily the case that the government will follow through on the panel’s suggestions, however.
Indeed, given how the world seems to be accepting, even if slowly, the idea that decentralized currencies can boost their economies, the government may just choose to regulate the market and devise new laws, thus allowing economic growth, and preventing fraud and manipulation.
Time Will Tell How India Responds
However, the exact content of the report is yet to be revealed, so many crypto enthusiasts and exchanges in the country will hope that the report’s conclusions are not as severe as is now being reported.
Earlier in the year, India’s central bank, the Reserve Bank of India, effectively banned the use of cryptocurrencies in the country by preventing financial institutions from offering their services to exchanges.
This resulted in the shutdown of several exchanges, though peer-to-peer solutions appear to be growing.
India’s younger generations are known to be highly tech-savvy, and any negative decisions are sure to cause umbrage. A more measured approach by the government that regulates cryptocurrency sensibly, as opposed to a blanket ban on all crypto related activity, would be very welcome.