Ahead of the G20 summit, India’s new finance secretary
has confirmed that the report detailing the country’s crypto regulation
is now ready. It will soon be submitted to the finance minister for
approval. Since Arun Jaitley opted out of cabinet responsibilities,
Prime Minister Narendra Modi has appointed a new finance minister.
Also read: Indian Supreme Court Postpones Crypto Case at Government’s Request
India’s Crypto Regulation Is ‘Ready’
After more than one year of analysis and deliberation, the report
containing the recommended regulatory framework for cryptocurrency in
India is now ready to be submitted to the finance minister, according to
local media. The new finance secretary, former Secretary of the
Department of Economic Affairs (DEA) Subhash Chandra Garg, reportedly
confirmed its readiness at an event hosted by the Associated Chambers of
Commerce and Industry of India on Thursday.
“On the cryptocurrency regulation, Garg said the report is ready,”
PTI reported, further quoting the finance secretary as saying:
We will submit it to the finance minister (soon). Of course, once the approval is done, it will be made public.
Garg heads an interministerial committee instituted to study all
aspects of cryptocurrency and draft the country’s crypto regulation.
Included on the committee are representatives from the Ministry of
Electronics and Information Technology, the Reserve Bank of India (RBI),
the Securities and Exchange Board of India, and the Central Board of
Direct Taxes.
This draft regulation was supposed to be ready in July last year. “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 [2018],” Garg explained in an interview at the time. However, no crypto regulation has been announced and the Ministry of Finance told
Lok Sabha in December last year that “the department is pursuing the
matter with due caution,” noting that “It is difficult to state a
specific timeline to come up with clear recommendations.” The government
subsequently shared with
the supreme court in February that the report containing the
recommendations for India’s crypto regulation is in the final stages of
deliberation.
RTI Request Rejected
Another indication that the committee’s crypto report has either been
finalized or is being finalized is the government’s reply to a Right to
Information (RTI) request filed by the founder of local news outlet Coin Crunch India. Naimish Sanghvi asked the DEA about the reported “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019.”
Last month, the Economic Times wrote that this bill had been
circulated to relevant government departments for discussion, citing an
unnamed government official claiming to know the details of the bill.
The news outlet noted at the time that, based on the feedback, “A final
law will be proposed to the next government that takes charge after
elections at the end of May.”
“The RTI was filed on April 26, one day after the reports surfaced.
On May 20, 2019 DEA rejected the RTI application citing ‘Section
8(1)(i)’ as the reason for rejection,” Coin Crunch India shared. “This
could mean that DEA simply rejected it because eventually the
information has to be made public.”
Section 8(1)(i) of The Right to Information Act 2005 states
that “the decisions of Council of Ministers, the reasons thereof, and
the material on the basis of which the decisions were taken shall be
made public after the decision has been taken, and the matter is
complete, or over … those matters which come under the exemptions
specified in this section shall not be disclosed.”
Jaitley Out, Modi Appoints New Finance Minister
Garg said that his committee’s report will soon be submitted to the
finance minister, the position held by Arun Jaitley since 2014. However,
Jaitley is suffering from poor health and has opted out of cabinet
responsibilities. On May 29, he posted on Twitter a letter addressed to
Modi which reads:
I am writing to you to formally request you that I should
be allowed a reasonable time for myself, my treatment and my health
and, therefore, not be a part of any responsibility, for the present, in
the new government.
The letter continues, “I would obviously have a lot of time at my
disposal to undertake any work informally to support the government or
the party.”
Jaitley’s famous budget speech on cryptocurrency in February last
year has been cited far and wide when he said that “The government does
not recognise cryptocurrency as legal tender or coin,” Quartz India
quoted him as saying. However, some people mistook his speech as meaning
that cryptocurrency was illegal. The CEO of local crypto exchange
Unocoin, Sathvik Vishwanath, clarified
to news.Bitcoin.com: “The finance minister was clear: cryptocurrencies
are not legal tender in India. He did not say that they are not legal in
India. There’s a huge difference.”
On Friday, Modi appointed Nirmala Sitharaman, who served as the
country’s Minister of Defence until May 30, as the new finance and
corporate affairs minister. She is India’s first full-time female
finance minister.
Crypto Community’s Campaign
The Indian crypto community had been campaigning to Jaitley and other
lawmakers for positive regulation and the end to the banking
restriction. The RBI issued a circular in April last year, prohibiting
regulated financial institutions from providing services to crypto
businesses. Banks subsequently closed accounts of crypto exchanges.
Nischal Shetty, CEO of local crypto exchange Wazirx, started a social media campaign
for positive crypto regulation 213 days ago. While wishing Jaitley a
speedy recovery, he emphasized that his “India Wants Crypto” campaign
“will continue and we’ll ensure that India is at the forefront of the
crypto revolution.” Noting that “Positive crypto regulations in India
will help create wealth and jobs for millions of Indians” and “Millions
of youth in India want to see positive crypto moves by the government,”
he urged the new finance minister to introduce positive crypto
regulation.
The community now awaits a formal announcement from the government as well as the supreme court hearing on July 23.
The court is expected to address two crypto-related issues: the
regulatory framework recommended by the Garg committee and the banking
restriction by the central bank.
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