The confusion over the cryptocurrency ecosystem in India is far from over as according to the latest reports, the Reserve Bank of India (RBI) has decided to shelve its plans to launch the digital currency in the country. The country’s Central Bank, as well as the government, thinks that it is too early to take a plunge into cryptocurrency even as the trading of digital coins gain momentum in India. According to Business Line’s report (citing unnamed sources), the Indian government and RBI decided that the time is not ripe for the launch of cryptocurrency in the country. Business Line’s queries in this regard were not responded by RBI.
Central Bank Digital Currency (CBDC)
It is important to note that in August 2018, RBI constituted an inter-departmental committee to study the feasibility of launching Central Bank Digital Currency (CBDC). The committee had already submitted its report; however, none of the findings had ever released to the media or made available in the public domain. The idea behind RBI’s intention to launch CBDC stemmed from the necessity to curb black money, money laundering, tax evasion, and cybersecurity threats. All these pressing issues were at the focus behind CBDC; however, with no apparent progress in sight, the whole concept of central cryptocurrency seems to be hanging in the air now.
Delay Necessary or Unwarranted?
Cryptocurrency experts, however, find this delay quite a logical one. Praveen Kumar, the founder of Belfrics (Bengaluru-based crypto exchange), said that before the launch of a central cryptocurrency, it is required to thoroughly understand the cryptocurrency economy and open distributed ledger phenomenon at the heart of crypto exchanges. The peer-to-peer exchange comes with its own set of challenges and therefore, hasting through the launch is not a good idea.
Crypto Regulations in India
All these current developments indicate that the Indian government is in no hurry to take any decision regarding cryptocurrency and has rather decided to adopt a wait-and-watch policy. Others like UAE, Malta, and Gibraltar have already taken a deep plunge into cryptocurrencies and bracing for its impact on their economies. Now depending upon the outcome of the regulations favoring the cryptocurrencies across the globe, this year is going to be a crucial year for the fate of digital coins across the globe.
Despite cryptocurrencies gaining recognition world over, their current state in India is not at all desirable. On April 5, 2018, RBI announced a ban on the cryptocurrencies and barred the banks from dealings in digital coins. The decision came as a surprise for many as the current dispensation at the center is pushing towards digital transactions and the cashless economy. Subsequently, the decision to ban cryptocurrencies was challenged in the High Court on April 25, 2018. The case was then transferred to the Supreme Court of India which rescheduled the hearing on September 2018. Since then, there were numerous adjournments with apparently no conclusion of the matter in the near future.
Ray of Hope
Amidst all doom and gloom, there is still a ray of hope. As reported by BTC manager on December 26, 2018, the cryptocurrencies could soon become legal in India as second interdisciplinary committee constituted by the government is in favor of legalizing the cryptos under a new regulatory framework with some riders. However, nothing is confirmed officially till now.