A dubious concern in the banking finance sector in India today is the debate over according legal status to crypto/virtual currencies ("CCs"). The Reserve Bank of India ("RBI"), vide a notification[1] ("Notification"), directed all entities regulated by RBI not to deal in CCs or provide any services for facilitating any person in dealing or settling with CCs. As the blockchain enthusiasts, the crypto-exchanges and individuals holding CCs, across the globe watched in approbation, in March 2020, the Supreme Court of India[2] ("SC Case"), quashed the Notification, holding that the restrictions imposed by the Notification were disproportionate to the concerns raised by the RBI and therefore unsustainable. However, it was also held that RBI has inherent powers to regulate the dealing and trading of CCs in the interest of the banking system, monetary stability and sound economic growth[3]. While this development was emblematic of optimism amongst industry players in India, the quashing of Notification had only brought CCs into a grey area and one could not have elided that RBI and legislators will be oblivion to any activity relating to CCs in future.
The Parliament proposes to introduce Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 ("Crypto Bill") in its ongoing session. The Crypto Bill seeks to ban all private cryptocurrencies and create a legitimate framework for official digital currency in India, backed by government/RBI, while providing certain exceptions to promote the underlying technology driving the digital currency.
The Crypto Bill: What we see ahead?
The absence of any legislative/regulatory framework or policy confirming the status of CCs till date and the validity of trading in and dealing with them, questioned their future in India which hinged over a murky structure. The Crypto Bill has brought a ray of hope, suggesting a possible advent of a digital currency in India and its regulation by RBI/government. However, the Crypto Bill also suggests banning of all the private cryptocurrencies. The very news of introduction of Crypto Bill in the Parliament session has sent out shivers in the cryptocurrency market. The industry practitioners have hit the panic button due to the speculative foresightedness attached to the Crypto Bill, including more particularly the banning of 'private cryptocurrencies'.
As to what is a 'private cryptocurrency' remains unclear for now as the draft of the Crypto Bill has not been made available to public. The crypto evangelist bat for currencies like Bitcoin and Ethereum to be public currencies, however there is uncertainty, whether the Crypto Bill will render the use of currencies like Bitcoin and Ethereum illegal in India.
Further, it remains to be seen whether CCs will be treated as a 'currency' or a 'stock' or there will be an outright ban on dealing with them. The proliferators of CCs contend that they cannot be differentiated, without any reasonable basis, from other persons engaged in the business, including that of pre-paid wallets and other electronic dealings in money, purely because they are engaged in the use, trade or dealing of CCs and that vetoing use of CCs infringes upon the right to carry out trade and business and impairs the Right to 'Equality'[4], Right to carry out 'Trade or Business'[5] and Right to 'Life and Personal Liberty'. Whereas, the primordial concerns of RBI/government that could make CCs nefarious and question their acceptability, are the volatility and fluctuation of their value and anonymity of transactions, which may give rise to cybercrimes, money laundering, misinformed investments by consumers, frauds and terrorism financing.
The forward strategy
The Indian citizenry have long delved themselves into the use, trade and sale of CCs and have established highly successful businesses in the form of crypto exchanges and blockchain driven start-ups and therefore one cannot sign off CCs completely. Crypto firms in India have also experienced a successful phase during the pandemic lockdown and the trading on crypto exchanges increased manifolds. Were at one hand the government's current move threatens to put the future of this industry in disarray once again, the introduction of Crypto Bill will also be a welcome step. However its success will depend on various factors, like defining 'private cryptocurrencies', contours of regulation and power given to the regulators to regulate the use and trade of CCs, that will decide the fate of CCs in India. At this stage, the government may consult stakeholders before coming to a decision on status of CCs in India.
In the milieu of the nascent technology-driven businesses, subsequent to the SC Case, the world now awaits in high anticipation of the Indian policymakers'/legislator's next move to see whether there will be an outright ban or there will be a regulatory framework on CCs or whether and the lawmakers/government come up with a hybrid digital currency that is backed and regulated by the RBI. A pragmatic sense suggests that the lawmakers and RBI regulate the trading of CCs, either by coming up with a substantive legislation or regulation/policy by RBI for regulating and facilitating the dealings in CCs either as a currency or a virtual asset, ensuring the following inclusions, amongst others;
Views are personal.
[2] Internet and Mobile Association of India vs Reserve Bank of India, 2020 SCC Online SC 275
[4] Constitution of India, 1950, Art. 14.
[5] Constitution of India, 1950, Art. 19, Cl. (g).
- MIT-educated brothers accused of stealing $25 million in cryptocurrency in 12 seconds in Ethereum blockchain scheme - CBS News - May 15th, 2024 [May 15th, 2024]
- DOJ Charges 2 Brothers With Scheme to Steal Cryptocurrency - PYMNTS.com - May 15th, 2024 [May 15th, 2024]
- US charges two brothers with novel $25 million cryptocurrency heist - AOL - May 15th, 2024 [May 15th, 2024]
- MIT-educated brothers allegedly stole $25M in crypto in just 12 seconds - New York Post - May 15th, 2024 [May 15th, 2024]
- DOJ charges 2 brothers tied to $25M attack on MEV bots last year - Blockworks - May 15th, 2024 [May 15th, 2024]
- Brothers indicted for 'first-of-its-kind' cryptocurrency heist - Courthouse News Service - May 15th, 2024 [May 15th, 2024]
- The Ultimate Cryptocurrency to Buy With $1,000 - The Motley Fool - May 15th, 2024 [May 15th, 2024]
- Sonne Finance developers offer bounty to hacker behind $20 million crypto theft - The Record from Recorded Future News - May 15th, 2024 [May 15th, 2024]
- Brothers indicted over $25 million Ethereum cryptocurrency theft: DOJ - FOX 10 News Phoenix - May 15th, 2024 [May 15th, 2024]
- Cryptocurrency Price on May 15: Bitcoin dips below $62k ahead of US inflation report today - The Economic Times - May 15th, 2024 [May 15th, 2024]
- $100 Trillion Market Cap For Cryptocurrency Will Be a Reality: Analyst - Watcher Guru - May 15th, 2024 [May 15th, 2024]
- This Week in Web3: Crypto Payment Rails and Regulatory Clarity - PYMNTS.com - May 15th, 2024 [May 15th, 2024]
- Unveiling Fourprime Token Where Innovation Meets Cryptocurrency Revolution - AccessWire - May 15th, 2024 [May 15th, 2024]
- Binance: A Comprehensive Overview of The World's Leading Cryptocurrency Exchange - Blockchain.News - May 15th, 2024 [May 15th, 2024]
- Cryptocurrency Likely to Resume Rally: 4 Stocks Set to Gain - Yahoo Finance - May 15th, 2024 [May 15th, 2024]
- Cryptocurrency: Mass Institutional Adoption Underway, with Bitcoin, BlockDAG Network, and Ethereum Value Surge - Yahoo Finance - May 15th, 2024 [May 15th, 2024]
- The Ultimate Cryptocurrency to Buy With $1,000 - sharewise - May 15th, 2024 [May 15th, 2024]
- Two Brothers Arrested for Attacking Ethereum Blockchain And Stealing $25M In Cryptocurrency - Eurasia Review - May 15th, 2024 [May 15th, 2024]
- 3 Potentially Brutal Cryptocurrency Risks That Most Investors Simply Aren't Ready For - The Motley Fool - May 15th, 2024 [May 15th, 2024]
- Crypto customer scammed in alleged HK$1 million hell money scheme in Hong Kong - South China Morning Post - May 15th, 2024 [May 15th, 2024]
- Brothers accused of stealing $25 million in cryptocurrency in 12 seconds - MSN - May 15th, 2024 [May 15th, 2024]
- Solana (SOL) Price Prediction 2024,2025 And 2030 Forbes Advisor INDIA - Forbes - May 15th, 2024 [May 15th, 2024]
- Cryptocurrency Warning: Avoid These 3 Failing Names - InvestorPlace - May 15th, 2024 [May 15th, 2024]
- Top 3 Cryptocurrency to Invest Now According to Reddit: Bitcoin, Ethereum, Furrever Token - Yahoo Finance - May 15th, 2024 [May 15th, 2024]
- Two Brothers Educated In Prestigious University Stole Cryptocurrency Worth $25 Million In 12 Seconds, Feds Allege - Daily Caller - May 15th, 2024 [May 15th, 2024]
- 6 Altcoins To Consider Buying For The Next Bull Run In 2024 - Forbes - May 15th, 2024 [May 15th, 2024]
- US charges two brothers with novel $25 million cryptocurrency heist - ThePrint - May 15th, 2024 [May 15th, 2024]
- Bitcoin Just Did Something It Has Only Done 3 Times Before. The Cryptocurrency Usually Does This Next. - The Motley Fool - April 25th, 2024 [April 25th, 2024]
- Cryptocurrency Market News: Bitcoin Halving Steadies Price, Network Transaction Fees Spike - Investopedia - April 25th, 2024 [April 25th, 2024]
- Bitcoin Just Did Something It Has Only Done 3 Times Before. The Cryptocurrency Usually Does This Next. - Yahoo Finance - April 25th, 2024 [April 25th, 2024]
- 10 Best Cryptocurrencies To Buy In April 2024 - Forbes - April 25th, 2024 [April 25th, 2024]
- Movement Labs raises $38 million to build layer 2 blockchain on Ethereum with Facebook tech - Fortune - April 25th, 2024 [April 25th, 2024]
- Cardano Founder Charles Hoskinson Reiterates Core Purpose of Cryptocurrency Here's What You Need to Know - Cryptonews - April 25th, 2024 [April 25th, 2024]
- From Cryptocurrency to Cannabis: 7 Penny Stocks on the Rise - InvestorPlace - April 25th, 2024 [April 25th, 2024]
- South Carolina: Cryptocurrency scams on the rise in Upstate - WYFF4 Greenville - April 25th, 2024 [April 25th, 2024]
- Binance BNB Memecoin Traders Join 100X New Cryptocurrency On Uniswap - Yahoo Finance - April 25th, 2024 [April 25th, 2024]
- The Future of Real Estate: Investing in Tokenized Properties with Cryptocurrency - ForexLive - April 25th, 2024 [April 25th, 2024]
- The Current Position with Cryptocurrency Regulation in the United States - Latest Cryptocurrency Prices & Articles - April 25th, 2024 [April 25th, 2024]
- 3 Must-Know Facts About Ethereum, Before You Buy the Cryptocurrency - The Motley Fool - April 25th, 2024 [April 25th, 2024]
- Cryptocurrency: 3 Meme Coins To Watch In May for Exponential Gains - Watcher Guru - April 25th, 2024 [April 25th, 2024]
- EOS Falls 14% In Bearish Trade By Investing.com - Investing.com - April 25th, 2024 [April 25th, 2024]
- The UItimate Cryptocurrency to Buy With $1,000 Today - The Motley Fool - April 25th, 2024 [April 25th, 2024]
- Romance scams involving AI images, cryptocurrency on the rise in Chicago - CBS Chicago - April 25th, 2024 [April 25th, 2024]
- Bitcoin Halving Event Of 2024: The Aftermath Forbes Advisor Australia - Forbes - April 25th, 2024 [April 25th, 2024]
- Cryptocurrency Ethereum Classic Down More Than 4% Within 24 hours - Benzinga - April 25th, 2024 [April 25th, 2024]
- Cryptocurrency: Top 3 Coins To Buy Now For 10X Gains In 2024 - Watcher Guru - April 25th, 2024 [April 25th, 2024]
- What's going to be different with the halving of Bitcoin this time? - Euronews - April 25th, 2024 [April 25th, 2024]
- Cryptocurrency OKB Decreases More Than 3% Within 24 hours - Benzinga - April 25th, 2024 [April 25th, 2024]
- Cryptocurrency OKB Decreases More Than 3% Within 24 hours - Investing.com UK - April 25th, 2024 [April 25th, 2024]
- Cryptocurrency Kaspa Falls More Than 3% In 24 hours - Benzinga - April 25th, 2024 [April 25th, 2024]
- BRICS To Replace US Dollar With Cryptocurrency for Trade - Watcher Guru - April 25th, 2024 [April 25th, 2024]
- Bitcoin Halving Sparks Unprecedented Transformation in Cryptocurrency Market - West Island Blog - April 25th, 2024 [April 25th, 2024]
- Influential Analyst on YouTube Shares High-Potential Cryptocurrency That Could Beat Shiba Inu (SHIB) and Dogecoin (DOGE) Gains in This Bull Run -... - April 25th, 2024 [April 25th, 2024]
- Cryptocurrency Uniswap Up More Than 3% In 24 hours By Benzinga - Investing.com UK - April 25th, 2024 [April 25th, 2024]
- Bitcoin is halving again what does that mean for the cryptocurrency and the market? - The Conversation - April 25th, 2024 [April 25th, 2024]
- Cryptocurrency Ethereum Classic Down More Than 4% Within 24 hours By Benzinga - Investing.com UK - April 25th, 2024 [April 25th, 2024]
- RackNerd Expands Cryptocurrency Payment Options with Coinify Integration, Accepting Over 30 Cryptocurrencies - PR Web - April 25th, 2024 [April 25th, 2024]
- What Meltdown? Crypto Comes Roaring Back in the Philippines. - The New York Times - March 18th, 2024 [March 18th, 2024]
- Chinas cryptocurrency investors made gains of US$1 billion in 2023 - South China Morning Post - March 18th, 2024 [March 18th, 2024]
- 1 Super Cryptocurrency Could Soar to $200,000 by 2025, According to a Wall Street Analyst - The Motley Fool - March 18th, 2024 [March 18th, 2024]
- Cryptocurrency Miners Need to Report their Energy Use - Earthjustice - March 18th, 2024 [March 18th, 2024]
- Understanding the Fundamental Differences Between Cryptocurrency and Fiat Currency - FinSMEs - March 18th, 2024 [March 18th, 2024]
- SOL Flips BNB, Becoming 4th Largest Cryptocurrency as Ethereum Becomes Next Target - CCN.com - March 18th, 2024 [March 18th, 2024]
- Prosecutors seek from 40 to 50 years in prison for Sam Bankman-Fried for cryptocurrency fraud - The Associated Press - March 18th, 2024 [March 18th, 2024]
- Cryptocurrency: 3 Meme Coins That Could 15x This Bull Season - Watcher Guru - March 18th, 2024 [March 18th, 2024]
- Can the Bitcoin surge push India to overcome its cryptocurrency hurdles? - The National - March 18th, 2024 [March 18th, 2024]
- The Ultimate Cryptocurrency to Buy With $1,000 Today - Yahoo Finance - March 18th, 2024 [March 18th, 2024]
- Cryptocurrency laundryman gets hung out to dry - The Register - March 18th, 2024 [March 18th, 2024]
- Bitcoin price predictions: How much more could it rise in 2024? - Euronews - March 18th, 2024 [March 18th, 2024]
- Shiba Inu Is Skyrocketing: Is It a Top Cryptocurrency to Buy Right Now? - Yahoo Finance - March 18th, 2024 [March 18th, 2024]
- 1 Top Cryptocurrency to Buy Before It Soars 1,328%, According to Cathie Wood of Ark Invest - The Motley Fool - March 18th, 2024 [March 18th, 2024]
- The other Bitcoin rally: How scams are cashing in on the cryptocurrency fever - EL PAS USA - March 18th, 2024 [March 18th, 2024]
- Kalshi Prediction Market To Introduce Cryptocurrency Betting (Payouts In USD) - Blockchain Magazine - March 18th, 2024 [March 18th, 2024]
- Bitcoin Hits Record $72,000, Emboldening Crypto Industry - The New York Times - March 18th, 2024 [March 18th, 2024]
- Solana (SOL) Flips BNB to Become 4th Largest Cryptocurrency - Watcher Guru - March 18th, 2024 [March 18th, 2024]
- Predicting which Cryptocurrency will Boom in 2024 - ForexLive - March 18th, 2024 [March 18th, 2024]
- Nigeria's Cryptocurrency Crackdown Will Have Consequences, Experts Say - Voice of America - VOA News - March 18th, 2024 [March 18th, 2024]
- Crypto ETN providers head for UK but urge rethink on retail ban - Financial Times - March 18th, 2024 [March 18th, 2024]
- Trump Signals Positive Stance on Cryptocurrency If Elected to the White House - Yahoo Finance - March 18th, 2024 [March 18th, 2024]
- Bitcoin Bulls vs. Bubble Bears: A Cryptocurrency Clash - Crypto Times - March 18th, 2024 [March 18th, 2024]