Indian Authorities May Not Unban Bitcoin or Regulate Cryptos Until After the Elections
India has shown a harsh and draconian stance towards bitcoin and other digital assets in recent times by mandating financial institutions in the state to desist from servicing crypto-linked businesses earlier in 2018, instead of formulating rules to govern its cryptospace.
With the 2019 Indian general elections scheduled to hold from April 2019, cryptocurrency enthusiasts in the region may have to wait much longer before the authorities regulate the pace.
No Crypto Regulation in Sight
According to reports published March 30, 2019, the Indian Election Commission code of conduct stipulates that no new laws can be passed during the election.
The nation’s 2019 general election which is divided into seven phases, is expected to be held between April 11 and May 19, 2019, while the results will be announced on May 23.
Commenting on the matter, Varun Sethi, founder of Blockchain Lawyer, a firm that claims to advice blockchain-focused firms on legal compliance and systems design, reiterated that:
“During elections in India, ‘aachar Sanhita’ or code of conduct applies. In essence, no new law can be passed, and as such, we do not expect the government to make any official announcement regarding crypto regulation or others.”
In the same vein, Sumit Gupta, CEO of Coindcx cryptocurrency exchange also shed more light on the matter. He explained that:
“According to the Election Commission model Code of Conduct, no critical welfare policy decisions can be made after the dates for general elections have been set. Since the dates for this year’s general elections has been announced publicly, the government might not regulate the crypto industry until after the elections.”
Regulatory Uncertainty Abound
As reported by Bitcoin Exchange Guide earlier on February 25, 2019, the Supreme Court of India ordered the country’s financial regulators to implement robust crypto regulatory guidelines within four weeks.
The court was reportedly expected to conduct a crypto regulation hearing on March 29, from the interministerial committee headed by Subhash Chandra Garg, Secretary of Department of Economic Affairs at the Ministry of Finance, but the government’s counsel prayed the court to adjourn the hearing until July 2019.
However, with the new development, Sethi has made it clear that “Till the time the Supreme Court case is pending for the hearing, the government will not be able to make an announcement.”
Unlike jurisdictions like Malta, Gibraltar, as well as several other nations that have put in place rules to govern their cryptospace, India has exhibited a somewhat lackadaisical attitude towards regulating its digital assets ecosystem.
In December 2017, a panel headed by Subhash Chandra Garg, secretary in the department of economic affairs, was set up to draft and submit a proposal in July 2018, so that the government could use this framework to regulate its crypto industry.
However, up till now, the government is yet to make any significant progress as regards crypto regulation. Instead, its focus has been on blockchain adoption.
“DLT is an interesting thing. We definitely want to harness it effectively for financial transactions. So all government officials are trying hard to understand how to separately use blockchain, without cryptocurrency,”
said an unnamed senior official of the Indian government in August 2018.
Due to the super volatile nature of digital assets, coupled with the increasing use of privacy-centric cryptoassets for illicit activities such as money laundering, the government is reportedly not in a hurry to regulate the space just yet.
In late 2018, India’s finance ministry reportedly told Lok Sabha, India’s lower house parliament that the regulators are taking their time to formulate rules for crypto and there is no specific timeframe for the implementation of these rules.