The Centre has been trying to counter the growing importance of crypto assets for a few years. When initial attempts to place a blanket ban on digital money failed, authorities in Delhi seemed to back an RBI-issued crypto currency. Now a committee of legislators and industry experts is rumoured as likely, charged with providing a solid backing for any upcoming regulations.
Turnaround on Crypto Not Yet Official but Digital Businesses Hopeful
The Indian Government has previously and repeatedly stood against crypto currencies, as regulators seemed to consider them a threat to the national banking system. With the rising of crypto assets in the global context of digital finance, some Delhi officials have begun to have their doubts. Lately, there have been reports that the Centre may consider forming a panel to analyse wider blockchain impacts on online businesses and explore regulatory options for crypto assets.
One thing is certain: the millions of young and tech-savvy online desi users are likely to support such a move. Widely used for trading, investment, online entertainment and personal transfers, crypto currencies are part of a new generation of digital assets that meet widespread approval.
Bringing some legal clarity in the sector could also result pivotal for a number of online business segments. In a feature presentation at SEOCon Indonesia last month, Mattias Bergehed – CEO of ENV Media – revealed that payment providers and options remain crucial in online gaming, a key tech industry with a growing relevance for the daily habits of the desi consumer.
With crypto currencies, the Indian market gives an extra dimension of data privacy and financial security to segments like online lottery in India, social platforms and betting sites like 10Cric.. Even those who haven’t joined the crypto mania for investment purposes are likely to appreciate a safe new option for conducting business and personal matters.
Expert Panel in Sight
The rumoured committee’s composition is unclear, as of the time of writing. Its work, however, is presumed to cover more extensively the benefits of blockchain technology and its impacts on the nation’s digital economy. Based on such preparatory work, the panel is expected to propose meaningful regulation for crypto assets as opposed to mere digital currencies.
Unofficially the government has admitted that similar efforts produced by the Subhash Garg Committee back in 2019 were ineffective and are largely outdated. We are reminded that the resulting Draft Bill spoke of a blanket ban on crypto currencies but never saw the light of day.
Last but not least, the government-led panel is expected to explore the plans tentatively announced by the Reserve Bank of India (RBI) to launch a digital rupee. Integrating a national crypto coin in the framework regulations of the blockchain economy is likely to have crucial effects on the Indian tech industry and the competitiveness of the entire digital business sector.
New Strategy Needed to Harness the Power of Blockchain
As a matter of fact, the provisional announcements of the RBI on the matter have treated both aspects. Government officials have been preparing a bill to ban privately-issued crypto currencies as a fundamental step to launching and supporting the Union’s official digital money.
An info booklet issued towards the end of January 2021 spoke of similar measures going hand in hand. Finance industry analysts reminded that a previous ban issued by the Central bank (in 2018) was overturned by the Supreme Court in March of 2020 following a petition by crypto entrepreneurs and the tech industry association (IAMAI).
Digital business leaders have voiced their support for crypto assets – representing both tech start-ups and proven digital unicorns. Blockchain as a fundamental technology has almost unlimited potential and cryptocurrencies are merely a niche, albeit a rapidly growing one. Crypto asset investors across India are multiplying and providing added value to the economy.
In view of redrafting the 2021 Digital Currency Bill, Government officials seem poised to enter Parliament sessions much better prepared this time around.