It seems India has no intention of slowing down its crusade against cryptocurrencies – but at least, it might be open to experimenting with distributed ledger tech.
Following a meeting of the Financial Stability and Development Council (FSDC), the government is contemplating devising an appropriate legal framework to ban the use of cryptocurrency in India – and encourage experimenting with distributed ledgers instead.
“FSDC took note of the developments regarding strengthening of Cyber Security in Financial Sector including progress made towards setting up of a Computer Emergency Response Team in the Financial Sector (CERT-Fin) under a Statutory Framework,” the meeting notes read. “The Council also deliberated on the need for identifying and securing critical information infrastructure in financial sector.”
According to a statement, the meeting was attended by finance minister Arun Jaitley as well as members of the country’s central banking institution – the Reserve Bank of India (RBI). Curiously, Jaitley previously deemed cryptocurrencies aren’t “legal tender” in India; similarly, the RBI has previously been unreasonably critical of the concept of virtual currencies too.
Back in April, the RBI issued a directive demanding all local banks immediately suspend any dealings with cryptocurrency-oriented businesses. It later became clear the institution never even bothered properly researching the field of cryptocurrencies prior to releasing repeated warnings. It appears the RBI has since allocated a specific unit for blockchain and cryptocurrency research.
These draconian regulatory measures have practically forced India’s leading exchanged desks to shut doors. In the meantime, the Supreme Court is urging the RBI to once and for all clarify its stance on cryptocurrencies within the next two weeks.
Still, it’s worth pointing out India is also considering some alternatives to outright banning cryptocurrencies – like imposing additional taxes for crypto-assets.