Government may set up a new panel for regulation of cryptocurrencies

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The government is considering forming a new panel of experts to study the possibility of regulating cryptocurrency in India, according to a news report in The Economic Times. Earlier in 2019 an inter-ministerial committee on cryptocurrencies was formed headed by finance secretary Subhash Garg, which recommended a ban on cryptocurrency.

“It is a step in the right direction. I hope the government will also include the industry in this discussion. We are expecting a balanced approach and not a knee-jerk reaction. We want regulations that are thought through. We want the government to consult startups and investors for a balanced approach. It should be well thought of action from the government,” Avinash Shekhar, co-CEO, ZebPay, told Money9.

Siddharth, founder and COO of WazirX, told Money9: “I am happy at least there is a step forward. I hope we move fast and come to the right regulatory framework. Hopefully, we will be able to take it up with the RBI and some clarity comes.”

Decline in turnover

The news of forming a panel has come at the right time as due to the withdrawal of banking services many exchanges are witnessing a decline in turnover. The withdrawal came even after the Supreme Court last year in March 2020 set aside the RBI’s circular dated April 6, 2018, which banned cryptocurrency trading in India. Following the withdrawal of services IndiaTech.Org, an umbrella body for India’s technology start-ups, sent a 5-point policy proposal framework to the government and Reserve Bank of India for bringing positive crypto regulations to India.

Currently, however, in the absence of any clarification from the RBI, the cryptocurrency exchanges as well as crypto users are left in the lurch and are looking up to the regulator to clear the stance on whether banks in India can service the crypto industry or not. There are currently over 10 million crypto users in India with an estimated value of Rs 10,000 crore.