Current Indian Laws Are Inadequate to Deal with the Crypto Boom

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India’s relation to Bitcoin has been a peculiar affair so far. The government has announced a ban on cryptos including Bitcoin for a while now, but has not taken swift action so far. The ban is expected soon to the dismay of many including cryptocurrency exchanges that operate within the boundaries of current laws.

A few days ago, the Indian government admitted that existing laws are inadequate to deal with cryptocurrency. That’s why it’s rushing to introduce new legislation in order to track the instrument many trade with. Bitcoin’s recent price jump has made many governments rush to introduce new legislation in order to protect investors. Many see this as a reach for bigger control since no government likes the decentralized state of cryptocurrencies.

In India, the government does not consider crypto legal tender or currency, often associating it with illegitimate activities. The crypto boom in India has brought recognition to many new industries including crypto online gambling that are generating a massive amount of income, yet the government chooses to stay blind to it.

Solving the Indian Crypto Puzzle

India has had a complicated relationship with Bitcoin so far. The government doesn’t consider cryptos legal tender or currency, but so far has failed to introduce any legislation. It has been in the pipeline for quite a while, leaving investors and exchanges in the dust. Bitcoin’s latest price rise has saw it shooting over $50K to the delight of long-time investors and fans. However, everyone in India is scratching their head over what comes next. The state of Bitcoin in the Asian country is in true limbo. There’s no legislation yet, but it may come soon, so it’s kind of hard to invest in BTC at the moment.

Earlier this week, the government announced plans to solve the Indian crypto puzzle by updating the laws. An inter-ministerial group has apparently asked for a ban on Bitcoin and private cryptos except for the virtual currencies released by the state. It’s a major setback for cryptocurrency investors. The committee also asked for a new virtual currency that should be introduced as legal tender and will be regulated by the Reserve Bank of India.

Of course, this defeats the purpose of decentralized currencies and has disappointed crypto supporters. It’s obvious that the country is in shambles over the new legislation, so the times ahead for Indian Bitcoin investors may truly be dark.

A Slight Ray of Hope?

Rumors have it that there’s a small group in the government who believes this is not the way to move forward. The group has been working proactively on the proposed ban, arguing that cryptocurrency exchanges have brought a kind of “self-regulating” norms in the field of cryptos. Everyone agrees that money laundering is a major concern with Bitcoin and cryptos, but is a ban and a new centralized virtual currency the way to jump into the future?

Bitcoin is already being accepted in more and more countries and it’s time for India to jump on the bandwagon.

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February 24, 2021: • No Comments

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