India hasn’t been the friendliest jurisdiction to cryptocurrencies. The crypto industry in the country has been involved in an endless row with the country’s Reserve Bank, and the RBI has thus far had the upper hand. The animosity has pushed some crypto firms out of business this year. And now, another blow.
According to a new report, the Indian government is in no hurry to move in and regulate the industry. The country’s finance minister recently responded to concerns in parliament over the government’s laxity in regulating the increasingly-popular industry. There isn’t enough information or precedent to follow to regulate the industry, he stated. The regulatory ambiguity has cost the industry greatly in the country, and it looks set to continue doing so heading into 2019.
A Hands-Off Approach
India isn’t the only country that has shied away from stamping its foot on the crypto industry. However, its case is unique as there’s a blooming crypto industry in the country. This industry has consistently pushed for the formulation and implementation of regulation, but the government has turned a deaf ear.
According to Quartz, the government hasn’t made any inroads yet. And the industry shouldn’t be awaiting any regulation any time soon. Responding to a question in the country’s lower house- otherwise known as the Lok Sabha – Pon Radhakrishnan stated:
In absence of a globally acceptable solution and the need to devise a technically feasible solution, the department is pursuing the matter with due caution. It is difficult to state a specific timeline to come up with clear recommendations,
The row started way back as cryptos started becoming popular in India. This didn’t go down well with the Reserve Bank which took measures to clamp down on the industry. RBI ordered all financial institutions to sever all relationships with crypto companies, giving them a three-month period to do so.
The crypto community didn’t take this lying down. Several crypto firms came together and took the case to court, only for the Supreme Court to uphold the ban. And while the ban angered the petitioners enough on its own, they were even more incensed by RBI for not consulting all the industry stakeholders before making its decision.
RBI later warmed up to cryptos and the blockchain tech after it set up a crypto and blockchain unit in August. The unit would spearhead the supervision of emerging technology, key among them AI, cryptos and blockchain. It would also conduct research and help in the drafting of rules to govern the industry. Four months later, nothing tangible has come of the unit.
The country has the second-highest population in the world, four times that of the United States. It’s also the world’s largest remittance destination, receiving $70 billion in 2017 according to the World Bank. This makes it a prime market for cryptos, especially for cross-border transfers. Sending $200 from the United States to India can cost as much as $8. Sending the same amount via some cryptos such as Bitcoin Cash can cost a few cents at most.
Facebook has identified the vast opportunity that lies in India and intends to capitalize on it. As we reported recently, Facebook intends on launching a cryptocurrency that will enable Indians to pay through Whatsapp. The messaging app is quite popular in the country with over 200 million users.