India’s Financial Regulator’s Crypto Ban Might Be Lifted
RBI, India’s Central Bank recently admitted to not having done thorough research on cryptocurrencies before issuing its crypto ban. This comes in the wake of a reply sent by the bank to a Right to Information query filed by a lawyer. Copies of the communication have been distributed on social media and published by local crypto outlets.
Mr. Varun Sethi, an Indian blockchain lawyer, has asked the RBI several relevant questions, including if there was any committee constituted within the RBI that had determined the risks being associated with trading in virtual currencies. He also wanted to know how these risks were determined, and if any responsibility has been entrusted to an officer or a team to understand the nature, working of cryptocurrencies and the possibility of their usage in India.
To all of these questions, the RBI has replied negatively and done away with referencing its multiple circulars mentioned as justifications for its actions. The bank has also noted that it “was a member of the Inter-Disciplinary Committee constituted by the Finance Ministry and the Indian government in March 2017, to examine the status of virtual currencies and suggest regulations,” as if that provides enough legitimacy to issue a ban.
India’s financial regulators admitted to not doing before reaching a conclusion on its stance when it released a circular on December 24, 2013, reading that “The Reserve Bank of India has today cautioned the users, holders, and traders of virtual currencies (VCs), including bitcoins, about the potential financial, operational, legal customer protection and security related risks that they are exposing themselves to.”
By now it’s obvious that the RBI has neither done any research in regards to cryptocurrencies nor has it contacted any foreign counterparts in order to understand how the crypto technology works before taking its decisions.
Ajeet Khurana, the CEO of Zebpay commented about the current scenario of Indian exchanges and what can be expected in the coming days. When asked about boycotting financial institutions that do business with RBI, Mr. Khurana said that they believe that a robust “crypto assets market is good for India”. Their objective and approach are not confrontational considering they do not think they are in an “either-or situation”. Zebpay confirms to work with Indian regulators to come up with an inclusive framework which addresses their concerns. Simultaneously it also encourages innovation in financial technology.