The newly formed Indian government, led by Prime Minister Narendra Modi, is unlikely to change their stance on cryptocurrencies despite optimistic viewpoints from local industry leaders.
The previous task force recommended a blanket ban, but the newly set up committee has started their research afresh, as reported by Quartz India, June 4, 2019.
Political Uncertainty Holds India Back
The ex-minister of finance, Arun Jaitley, announced that Bitcoin and other currencies are not considered legitimate mediums of exchange in his 2018 budget speech.
While India has a murky relationship with cryptocurrencies, PM Narendra Modi spoke about blockchain technologies and distributed ledgers as a significant technological innovation. The government’s problem seems to be more associated with a financial system that they cannot control rather than any of the technical features of digital assets.
Community reactions have been fickle, with some welcoming a ban and others asking the Indian government to reconsider its stance entirely.
Nischal Shetty, the co-founder of WazirX, has been tweeting the government and other officials every day to raise public awareness around the impact cryptocurrency could have on the country.
India is known for its relatively conservative takes on political issues, and the current regime enjoys having a higher degree of financial control, visible from their installation of Shaktikanta Das as RBI Governor.
The Role of Regulation
By not regulating cryptocurrencies, India could be opening itself up to a plethora of issues. In a country where black money and illegitimate assets are rampant, blacklisting cryptocurrencies pushes them into this bracket and induces further criminal activity.
Regulation brings in certainty, and with it, fear of government crackdowns and traceability. While gold and real estate, the best investment vehicles to park illegitimate money, are not transparent in ownership, Bitcoin and other crypto networks are making it easy for governments to crack down on addresses that are involved with nefarious activity.