According to a statement by Subhash Chandra Garg, Secretary of the Department of Economic Affairs at the Ministry of Finance, the new Indian regulatory framework for cryptocurrencies is likely to be presented in the first half of July.
A draft has been put together and will be discussed in the first week of July. Garg, who is heading the committee tasked to determine the future of Bitcoin in India, explained:
«We are fairly close to developing a kind of template which we think might be in the best interest of our country. We have prepared a draft which we intend to discuss with the committee members in the first week of July».
The Finance Ministry representative also noted that the committee has made a lot of progress in regards to determining «what part of business should be banned, what should be preserved, and what not».
Earlier Mr. Garg said the Indian government didn’t not read cryptocurrencies as currency and would not allow its use in the country’s payment system. He explained that the executive power «would do something to eliminate» the illegal use of «crypto assets».
Nevertheless, he recognized that some people may still find value in cryptocurrencies and that would require introducing certain regulations so that crypto transactions are legal and transparent.
Garg noted that crypto exchanges in India are not regulated and said that the upcoming regulations would introduce legal requirements for know your customer (KYC) procedures and record keeping for transactions.
In February, he expressed hope that his committee would finalize its recommendations within this financial year. Then, legal changes would have to be made and regulatory responsibilities assigned. Indian media points out, that the panel headed by Garg is the 2nd body formed to come up with a solution, after the 1st committee didn’t complete the task.
The RBI gave commercial banks 3 months to comply with its directive formally motivated with the need to protect consumers and prevent money laundering. Recently, RBI admitted it had done no proper research into cryptocurrencies before issuing its circular. In the past few weeks, local exchanges have been preparing for the ban by terminating fiat deposits and withdrawals while launching and expanding crypto-to-crypto trading.
Several Indian crypto companies filed petitions against the restrictions that reached the Supreme Court. The hearing was initially set for July 20, two weeks after the RBI comes into effect, on July 5, which triggered protests by the members of the country’s crypto community.
However, Supreme Court has rescheduled the hearing for an earlier date on request by one of the petitioners – the Internet and Mobile Association of India (IAMAI). The review is now set to take place on July 3, before the enforcement of the ban.