India has not been a friend to cryptocurrencies of late. Their biggest claim to fame in the space surrounds their infamous decentralized cryptocurrency banking ban. Yet things appear to be changing here lately.
The government of India is now seriously considering creating its own cryptocurrency. They would use these for processing various financial transactions throughout India. To determine the feasibility of this, the Indians set up an inter-government committee. New Delhi tasked it with considering and proposing a new regulatory guide for digital assets. The committee is also contemplating the possibility of this new cryptocurrency for use in the public space.
India is Not Considering Reversing Their Sovereign Cryptocurrency Banking Ban
The caveat behind India’s seeming about face is that it will not change its stance on substitutes for their rupees. Instead, they are looking for something that can represent the rupee. For example, they might allow these to find use as currency for metro cards. They would replace the smart cards throughout the public sector as a starting point.
There are also applications under consideration for the private sector. Such uses might include airline frequent flyer loyalty programs. The cryptocurrency would only be viable for purchasing the next airline ticket. The committee is adamant that they could not be converted into actual money.
This committee arose in early 2017 as an offshoot of the Ministry of Finance. Represented on the committee are the Department of Economic Affairs, the taxation authority, and other ministries. It also counts representatives from India’s biggest bank, the State Bank of India, and the Indian Central Bank.
Originally established to study cryptocurrencies on international and domestic levels, it also considered legal and regulatory frameworks from other nations. Finally, the group has a mission to find ways to reduce potential for money laundering using the digital assets. Until this has been effectively addressed, India will not be releasing its cryptocurrency regulatory framework.
Meanwhile, April 2018 saw the central bank mandate that no financial institution may offer services to any cryptocurrency firm. There is no reason to get overly excited about digital assets and India just yet.