The Republic of India is one of the biggest countries of Asia and the second most populous country in the world with over 1.2 billion inhabitants. India is also one of the countries with several terrestrial connections with other countries.
They are directly connected to China, Arabia, Pakistan, Nepal, Bhutan, Myanmar, Sri Lanka and the Maldives, as well many other active societies. In terms of size, population and economic power, India is an Empire. In terms of Crypto, however, it is still yet to be discovered and conquered, though India definitely has the power to boost this budding industry.
2018 unfortunately brought disappointing news for Indian crypto enthusiasts. The Reserve Bank of India (RBI) issued an order that forced all activity related to cryptocurrencies to a screeching halt. All kinds of services to firms and individuals in non-official virtual currencies were declared forbidden. The Indian Supreme Court went even further when it ordered Exchanges to shut down. As a result, all trading activities ceased as of July 20th, the day when the RBI’s order was enacted. The business of facilitating transactions by cryptocurrency traders, including the pairing of BTC-Rupee, was deemed illegal.
Holding cryptocurrencies has not been forbidden, though. People who hold Bitcoins can keep their private keys and save their BTC, but they cannot convert it into rupees or trade with it. GCN has reached out for comment to a few Indian investors to know if Indian people have found a way to trade and they were kind enough to share some information with GCN. According to these informers, you can trade by using the universal platform known as Local Bitcoins, but without telling your bank that you are buying or selling BTC. Apparently, people also use WhatsApp and Telegram groups to trade as well. And some researchers even informed of restaurants where people go to trade directly.
Globalization can play a role in bringing down the barriers that local governments impose. In the case of India, this could become possible through two major global superpowers: the G20 and FATF. The G20 (or Group of Twenty) is an international forum integrated by government authorities and central bank governors from 19 countries plus the European Union. Its aim is to discuss policy pertaining to the promotion of international financial stability.
The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF is therefore a policy-making body which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
On December 1st, 2018, a new summit of the G20 was held in Argentina where new policies in favor of Blockchain and crypto were discussed. These could benefit Indian people who are focusing their attention on Bitcoin and Altcoins. The group of the world’s 20 biggest economies, including India, has agreed to introduce regulations on Blockchain assets to counter money laundering and financial terrorism, while handling cryptocurrencies as a positive development for our societies. It remained clear, however, that all new regulations must align to the Financial Action Task Force (FATF) guidelines.
According to these guidelines of FATF, governments should keep vigilant and ensure that virtual asset service providers are subject to anti-money laundering (AML), to counter financial terrorism (CFT) and to strict regulations to protect investors. All trading services must be fully capable of monitoring each trade and must be equipped with software for record-keeping, and they must report suspicious transactions in order to prevent the misuse of virtual assets. All this is seen as very positive by most crypto holders. And in the case in India, it seems to represent aperture, not more extreme restrictions as those that exist now.
This has given reasons to the Second Interdisciplinary Committee, a special committee of Ministers set up by the government in India, to raise a defending voice in favor of crypto users and crypto-business developers. Officials have already expressed publicly to news media: We have already had two meetings. There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders. Deliberations are ongoing. We will have more clarity soon. A First Interdisciplinary Committee had recommended heavy repression on Crypto in the past, but the new committee could be much more flexible.
This second interdisciplinary committee include RBI Executive Director Ganesh Kumar and also Finance Ministry officials who were present in Argentina for the G20, and they have worked together with FATF. This suggests a new positive disposition could be getting baked in this very moment. After the international event, positive public expressions have been heard. It is expected by many crypto users that these high Indian authorities have changed their negative views thanks to the global deliberations that took place during the summit, many of which have been recorded in documentation. For now, Indian authorities say they are even consulting with Exchanges and deepening communications. This is all helping raise the enthusiasm of crypto believers in India.