Crypto Clarity in India Delayed, RBI May Drop Digital Currency Plans


In April 2017, an Inter-Disciplinary Committee within the Indian government was formed to address concerns about public understanding and appreciation of the risks surrounding virtual and crypto currencies. Tasks undertaken were to:

"(i) take stock of the present status of Virtual Currencies both in India and globally; (ii) examine the existing global regulatory and legal structures governing Virtual Currencies; (iii) suggest measures for dealing with such Virtual Currencies including issues relating to consumer protection, money laundering , etc; and (iv) examine any other matter related to Virtual Currencies which may be relevant."

One year later, the RBI issued a circular cautioning the public and prohibiting certain dealings of virtual and crypto currencies.

A finance ministry panel examining and evaluating potential regulatory treatment for blockchain technologies and cryptocurrency was reported to have been poised to issue its recommendations and draft regulations in December 2018 from multiple sources, Quartz India reported that Pon Radhakrishnan, the minister of the state of finance, informed the Indian Parliament on December 28 that a finance ministry panel set up to deliver a draft report on crypto regulations has suspended further work indefinitely in stating the following:

“In absence of a globally acceptable solution and the need to devise technically feasible solution, the department is pursuing the matter with due caution. It is difficult to state a specific timeline to come up with clear recommendations.”

On the first day of 2019, The Hindu Business Line reported that the Reserve Bank of India (RBI) has set aside plans to issue its Central Bank Digital Currency (CBDC) indefinitely, with cybersecurity being cited as one major concern.

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