Author: Jagdish Kumar, India
After the Indian Supreme Court set another date for final hearing on the cryptocurrency ban petition filed by Indian crypto exchanges, it has been learn’t that the government will come up with a guidelines on crypto currency before the hearing.
During the initial hearing, the Reserve Bank of India (RBI) and crypto exchange companies advocates argued in the three judge bench headed by Chief Justice Dipak Misra, Justices AM Khanwilkar and DY Chandrachud that the matter needs to be finalized at the earliest.
After hearing the argument, the court decided to hear the matter on 11 September 2018 for final disposal.
A finance ministry official told the draft guidelines are ready, but the ministry is in consultation with all the stakeholders, including market regulator Securities and Exchange Board of India (SEBI), RBI and the Internet and Mobile Association of India (IAMAI) before coming up with the final paper.
It has to be noted that the court is hearing the petition filed by IAMAI for a stay on RBI circular which had effectively banned the use of cryptocurrencies in India.
Senior counsel, Shyam Divan representing RBI told the court that during the 20 July hearing that they will file a reply in the next three weeks.
Last year in April 2017, the finance ministry has an Inter- Disciplinary Committee chaired by Special Secretary (Economic Affairs) to examine the existing framework with regard to Virtual Currencies.
The committee was given three months to submit its report, but not yet completed. However, it is believed that the report will give some recommendation to regulate cryptocurrency, rather than banning it.
This panel was tasked to examine the existing framework on digital/cryptocurrencies both in India and globally and come out with measures for dealing with such virtual currencies on issues relating to consumer protection, money laundering etc.
Cryptocurrency is a new technology and globally government across the globe are struggling with it. Other than this, there are serious concerns as there has to be some mechanism to regulate the new industry, the official added.
In a statement on April 6, the RBI had said that such crypto and virtual currencies (VCs) raise concerns of consumer protection, market integrity and money laundering, among others.
“In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs,” RBI release adds.
The ban came into effect on July 6, after the SC refused to grant a stay on the ban.
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