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The framework: Crypto regulation and India

<ul><li>India’s crypto bill has not been listed as one of the legislative matters up for discussion during the <keyword id="662516" type="PERSON" weightage="20" keywordseo="monsoon-session-of-Parliament">Monsoon Session of Parliament</keyword>, which will begin on July 19.</li><li>According to <keyword id="5924793" type="PERSON" weightage="20" keywordseo="indiatech">IndiaTech</keyword> CEO, Rameesh Kailasam, the government is still in the process of determining whether or not to set up a new committee.</li><li>The government is seeking middle ground and not an all-out ban on cryptocurrencies, as proposed by the crypto bill that was supposed to be tabled during the Budget Session of Parliament earlier this year.</li></ul>India’s uncertainties around cryptocurrencies won’t be going away anytime soon. The Monsoon Session of Parliament, which is set to kick off next week on July 19, <a href="http://loksabhadocs.nic.in/bull2mk/2021/12.07.2021.pdf">does not list</a> virtual currencies as a matter that could ‘tentatively’ be up for discussion. “The likelihood of the bill getting placed in the parliament during the upcoming session is limited,” Rameesh Kailasam, the CEO of IndiaTech, told Business Insider. “The government seems to be still in the process of determining the way forward, which may through either an existing committee or a new one with industry consultation where required." <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[<div class="flourish-embed flourish-chart" data-src="visualisation/6724925"></div>]]></cdata></div> India’s Finance Minister, <a href="https://www.businessinsider.in/cryptocurrency/news/indias-new-crypto-regulations-are-ready-for-the-monsoon-session-of-parliament-according-to-sitharaman/articleshow/84168068.cms">Nirmala Sitharaman</a>, had hinted earlier this month that all the <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">crypto</a> bill needed was approval by the Cabinet — the supreme decision-making body of the Indian government — before being put up for debate in Parliament. The bill’s absence from the roster implies that either the Cabinet did not have time to go through the bill or it was sent back to the Ministry of Finance for revision. And, according to Kailasam, India’s apex banking institution — the Reserve Bank of India (RBI) — and the Indian government may not be on the same page anymore. "Considering the Supreme Court had lifted the ban on cryptocurrencies and subsequently the onus was on RBI and the government of India to bring in necessary regulations. Therefore a ban route may not be ideally plausible," he said. <cmsannotation type="cmsannotation" annotationid="There’s a new committee to regulate cryptocurrencies in the making" comment="subhead" text="There’s a new committee to regulate cryptocurrencies in the making">There’s a new committee to regulate cryptocurrencies in the making</cmsannotation> Any regulation around <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">cryptocurrencies</a> will require participation from multiple ministries. The earlier committee, headed by the former Finance Secretary Subhash Garg, had stakeholders from the Ministry of Electronics and Information Technology (MeitY), the Securities and Exchange Board of India (SEBI), the Department of Economic Affairs (DEA), and the RBI. “The government seems to be looking at this afresh considering that there needs to be a different take on how to regulate cryptocurrencies rather than push for an outright ban” said Kailasam. So, if the bill has to be rewritten, there needs to be a new committee put in place. Back in May, the <a href="https://economictimes.indiatimes.com/tech/technology/govt-may-set-up-new-panel-to-study-crypto-regulations/articleshow/82746324.cms">Economic Times</a> had also reported that a new panel may be being set up to study India’s crypto regulations. Once members are finalised, the committee will then draft a new version of the bill, which will have to be approved by the Ministry of Finance followed by the Law Ministry. And, that’s when the Cabinet finally gets a look at it. If the Cabinet wants revisions, the bill goes back to the committee — but even if they approve it, it can’t just be presented in Parliament. It has to first be put up for public consumption and take in any comments or suggestions. It’s only once it manages to get through all that red tape can the bill finally be listed for approval by Parliament. <cmsannotation type="cmsannotation" annotationid="The Indian government may be softening its stance on cryptocurrencies — RBI still unsure" comment="subhead" text="The Indian government may be softening its stance on cryptocurrencies — RBI still unsure">The Indian government may be softening its stance on cryptocurrencies — RBI still unsure</cmsannotation> The RBI does not have a history of being crypto-friendly. In 2018, it <a href="https://www.businessinsider.in/crypto-angadias-rbis-crypto-ban-might-incentivise-human-tellers-for-cryptocurrency-transactions/articleshow/63644805.cms">restricted banks</a> from engaging in crypto transactions or providing crypto services — a ban that was overturned in 2020 by the Supreme Court, which deemed it ‘<a href="https://www.businessinsider.in/finance/news/cryptocurrency-trading-can-restart-in-india-after-top-court-removes-rbi-ban-calling-it-unconstitutional/articleshow/74470872.cms">unconstitutional</a>’. However, the apex banking institution has refrained from giving its blessing to private cryptocurrencies. As a result, <a href="https://www.businessinsider.in/cryptocurrency/news/indias-banks-started-withdrawing-services-from-crypto-exchanges-earlier-this-month/articleshow/83109454.cms">most banks in the country</a> have also chosen to keep their distance from crypto exchanges and other services. In March, during the Budget Session of Parliament, the government had <a href="https://www.businessinsider.in/finance/news/indian-cryptocurrency-players-in-huddle-as-government-mulls-ban/articleshow/80610668.cms">planned</a> to introduce a bill that would allow the RBI to set up a centralised cryptocurrency while also banning all ‘private’ cryptocurrencies. “When the crypto bill was going to be introduced during the Budget Session of Parliament, both the RBI and the government may have been on the same page,” Kailasam explained. “But now — with the traction digital assets have gained over the last six months, detailed industry recommendations , and the Supreme Court’s judgement to ‘not’ ban cryptocurrencies in the limelight — the government is looking for a middle path with regulation.” The crypto industry has also been looking for new ways to reach out to the government, like forming a <a href="https://www.businessinsider.in/cryptocurrency/news/indian-crypto-exchanges-are-eyeing-more-industry-bodies-to-expand-influence/articleshow/83742929.cms">second lobby under IndiaTech</a>, to push for self-regulation. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/binances-compliance-journey-gets-bumpier-as-another-partner-backs-out/articleshow/84373786.cms">Binance’s compliance ‘journey’ gets bumpier as another partner backs out</a> <a href="https://www.businessinsider.in/cryptocurrency/news/a-single-bitcoin-transaction-has-a-bigger-carbon-footprint-than-100000-hours-of-youtube-videos/articleshow/84373569.cms">A single Bitcoin transaction has a bigger carbon footprint than 100,000 hours of YouTube videos — here’s how the crypto industry wants to fix that</a> <a href="https://www.businessinsider.in/cryptocurrency/news/south-korean-banks-are-finding-a-way-to-hold-onto-cryptocurrencies-without-having-to-touch-the-asset-itself/articleshow/84349075.cms">South Korean banks are creating custody companies to deal with cryptocurrencies — without having to touch the asset itself</a>

India's crypto bill is unlikely to be up for discussion this month — and it may be a while before we see it in Parliament

<ul><li><keyword id="6422582" type="UNKNOWN" weightage="20" keywordseo="Crypto-Exchanges">Crypto exchanges</keyword> in India are looking to form a new lobby and push for self-regulation.</li><li>This new coalition will be formed under IndiaTech, an industry body that represents other startups like Ola, MakeMyTrip, and Dream11.</li><li>Zebpay has confirmed its participation and other <keyword id="2721952" type="PERSON" weightage="20" keywordseo="crypto">crypto</keyword> exchanges are reportedly mulling it over.</li></ul>Crypto exchanges are joining hands to create a new lobby in India as regulatory uncertainty still looms overhead. And, this new lobby will be under the umbrella of IndiaTech — an industry body representing the country's leading internet startups like Ola, MakeMyTrip, Nykaa, Dream11, and more. <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">Crypto exchange</a> ZebPay has already confirmed its plans to join IndiaTech while other exchanges are still mulling it over, according to the <a href="https://economictimes.indiatimes.com/tech/technology/top-crypto-exchanges-plan-multi-pronged-push-for-regulation/articleshow/83716658.cms">Economic Times.</a> The new lobby won’t replace the work already being done with the Internet and Mobile Association of India (IAMAI), but be another avenue for these nascent companies to make their case to the Indian government, banks and other regulatory authorities. CoinDCX, a competing crypto exchange, is already a ‘standard member’ of IndiaTech. Self-regulation may buy crypto exchanges sometime Regulating an industry like crypto is not a straightforward task. Intricate details of new legislation can take months or even years to be prepared. India’s <a href="https://www.businessinsider.in/tech/news/indias-new-data-protection-bill-makes-a-good-show-of-user-rights-but-can-it-deliver-on-its-promises/articleshow/81422687.cms">Personal Data Protection Bill</a> has been stuck in the pipeline for three years as concerns over data usage and privacy have continued to escalate. In uncertain circumstances, the government has opted for a unique approach to address its issues with self-regulation. With this, the government not only looks like it’s taken a stance against what it believes to be against the law, but it has also passed the buck onto the organisations themselves to stay in line. For instance, over-the-top (OTT) players like Netflix and Prime Video were asked to <a href="https://www.businessinsider.in/policy/news/self-regulation-code-adopted-by-disney-hotstar-amazon-prime-and-other-ott-platforms-what-is-this-code/articleshow/78009955.cms">self-censor the content</a> back in 2019. This bought them two years. Come 2021, the government issued the <a href="https://www.businessinsider.in/tech/news/indias-new-rules-for-ott-platforms-could-lead-an-increase-in-content-related-disputes/articleshow/81306652.cms">new IT Rules</a> that may solve grievance redressals but brings up issues of content-related disputes. Following the same strategy, IndiaTech introduced a <a href="https://www.indiatech.org/wp-content/uploads/2021/05/IndiaTech.org_Crypto_Policy_Proposal_2021.pdf">whitepaper</a> in May 2021, proposing a five-point framework to regulate or monitor the industry. <h2 style="line-height:1.38;margin-top:0pt;margin-bottom:0pt;">A new avenue to show the Indian government that crypto exchanges are serious about regulation</h2> Leading crypto exchanges in the country have also <a href="https://www.businessinsider.in/cryptocurrency/news/wazirx-zebpay-crypto-and-others-are-setting-up-their-own-self-regulation-board-in-india/articleshow/83203195.cms">created</a> a new industry body called the Blockchain and Crypto Assets Council (BACC) under the aegis of IAMAI. These companies, which include Zebay, WazirX, and others have created self-regulating guidelines for money laundering, financial terrorism, and foreign exchange blunders. Until the government finds a solid regulatory body or framework, the self-imposed rules can help ease friction. Crypto exchanges and many experts have urged the government to consider <a href="https://www.businessinsider.in/cryptocurrency/news/bitcoin-classification-in-india-as-asset-may-not-solve-regulation-problem/articleshow/83434444.cms">cryptocurrencies as an asset class</a>, removing any doubt that it could potentially affect the country's fiat currency -- the rupee. At the same time, crypto exchanges are in overtime mode, reaching out to the government, banks, financial institutions, and more to seek acceptance and make way for a crypto future. <h2 style="line-height:1.38;margin-top:18pt;margin-bottom:6pt;">Uber, Ola, Dream11 and others went through similar hurdles</h2>India is infamous for its bureaucracy and red tape, a hurdle that every startup on the cusp of innovation has had to deal with. <a href="https://www.businessinsider.in/business/startups/news/uber-and-ola-are-not-acting-as-a-cartel-says-india-supreme-court/articleshow/79751539.cms">Uber and Ola</a> faced a hard time getting legal protection or approval. The entire country was under the control of cab mafias and unions that restricted a free market-like play. A considerable amount of dialogue and convincing was required to make cab-hailing services the new norm. Similarly, Dream11 faced a <a href="https://www.businessinsider.in/dream-11-gets-a-big-boost-from-bombay-hc-verdict/articleshow/69858772.cms">unique challenge</a> of operating its business since betting is considered illegal in the country. How do you pitch fantasy sports and their prediction as not ‘gambling’? The company defended its model by saying users require skills to make informed or correct decisions, improving their winning chances. In line with the stock market, it's a healthy mix of fundamental knowledge and market-based speculation. Today, a plethora of players like MPL, CricPlay, and more are leading the segment. And, <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">crypto exchanges</a> want to paint a picture of being like any of these other startups by associating themselves with IndiaTech. Just as these other services were too unique to be judged from the top, crypto exchanges too are merely ahead of their time. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/citymall-a-startup-that-helps-budding-entrepreneurs-start-their-ventures-on-whatsapp-has-raised-over-22-million/articleshow/83741383.cms">CityMall, a startup that helps budding entrepreneurs start their ventures on WhatsApp, has raised over $22 million</a> <a href="https://www.businessinsider.in/cryptocurrency/news/investments-in-crypto-hit-17-billion-in-the-first-six-months-of-2021/articleshow/83740327.cms">Investments in crypto hit a new record of $17 billion, but Indian funds are yet to jump on the bandwagon</a> <a href="https://www.businessinsider.in/business/ecommerce/news/flipkart-and-amazon-may-not-be-able-to-do-flash-sales/articleshow/83737670.cms">Amazon, Flipkart and other e-commerce platforms may not be able to do flash sales any more, if Indian government has its way</a>

There’s a new Indian crypto lobby in the making and Zebpay has confirmed its participation

<ul><li>Indian <keyword id="6357017" type="General" weightage="20" keywordseo="cryptocurrency" source="Orion">cryptocurrency</keyword> exchange <keyword id="6672551" type="General" weightage="20" keywordseo="wazirx" source="Orion">WazirX</keyword> recieved 377 requests from law enforcement agencies, both Indian and foreign, in the past six months.</li><li>Since April 2021, 14,469 accounts have been locked, including the 377 pertaining to criminal activity.</li><li>WazirX also reiterated its stance on how cryptocurrencies are not a replacement for fiat currencies, like the rupee.</li></ul>Indian cryptocurrency exchange, WazirX, received 377 requests for information from law enforcement agencies between April to September 2021. According to the company’s October Transparency Report, it has complied with all of them. <div type="ExtQuote" text="&quot;All law enforcement queries appear to be related to criminal proceedings, such as fraud, kidnapping and narcotics-related queries.&quot;" auname="Excerpt from WazirX’s Transparency Report dated October 11"></div> Overall, 14,469 accounts that have been locked since April 2021, 90% of them include both law enforcement agency-related requests, and others remain P2P or other user disputes which are “very common,” according to the company’s spokesperson. <cmsannotation type="cmsannotation" annotationid="wazirx" comment="wazirx" text="wazirx">wazirx</cmsannotation> The report, as well as the guidelines it highlights like know-your-customer compliance and investor education, comes at a time when India is in the throes of forming its own cryptocurrency regulation. <keyword id="2721952" type="General" weightage="20" keywordseo="crypto" source="Orion">Crypto</keyword>currency exchanges in India, like WazirX, have been partnering up under the umbrella of advocacy groups like the Internet and Mobile Association of India’s (IAMAI) Blockchain and Crypto Assets Council (BACC) and IndiaTech to push for self regulation. <div type="ExtQuote" text="&quot;Initiatives such as the transparency report add credibility to the ecosystem and make the crypto world look more appealing to outsiders. We aim to look at the bigger goals like positive regulations and consider ourselves paving the way to it through innovative approaches.”" auname="Statement by Nischal Shetty, CEO and founder of WazirX"></div> <cmsannotation type="cmsannotation" annotationid="WazirX maintains that cryptocurrencies are not meant to replace the rupee" comment="subhead" text="WazirX maintains that cryptocurrencies are not meant to replace the rupee">WazirX maintains that cryptocurrencies are not meant to replace the rupee</cmsannotation> The company’s transparency report, the first of its kind around cryptocurrencies in India, iterates that WazirX does not consider cryptocurrencies, Bitcoin or otherwise, to be a replacement for fiat currencies. “Crypto is an asset class and a utility on decentralised networks.” it said in the October Transparency Report. Simply put, while WazirX agrees that cryptocurrencies are essential for the ecosystem — one needs Ether to use any Ethereum application — it’s not a substitute for the rupee. Other aspects of the report include the importance of transparency, mechanisms in place to monitor for illicit activity, investor protection, and crypto education in India. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/crypto-hackers-now-target-iphone-users-via-dating-apps-like-bumble-tinder/articleshow/87105010.cms">Crypto hackers now target iPhone users via dating apps like Bumble, Tinder</a> <a href="https://www.businessinsider.in/cryptocurrency/news/bitcoin-marches-past-62000-as-uptober-continues/slidelist/87099389.cms">Bitcoin marches past $62,000 as ‘Uptober’ continues</a>

WazirX got 377 requests from law enforcement agencies in the last 6 months

<ul><li>The year has recorded investments worth $17 billion in the <keyword id="2721952" type="PERSON" weightage="20" keywordseo="crypto">crypto</keyword> space already, the largest in any year so far.</li><li>According to a whitepaper by IndiaTech, Indian companies only received 0.2% of the $5.5 billion invested globally as of May.</li><li>While foreign funds are still dipping their toe in Indian crypto companies, local investors remain wary due to regulatory uncertainty.</li></ul>Globally, the crypto industry’s fortunes may be turning around for the better. Nothing spurs growth for an industry more than investor interest, and it seems that the <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">crypto industry</a> is getting the best kind. According to a Bloomberg <a href="https://economictimes.indiatimes.com/tech/technology/venture-capital-makes-a-record-17-billion-bet-on-crypto-world/articleshow/83664252.cms">report</a> based on data from Pitchbook, venture capital funds have invested $17 billion into the industry during the first half of this year, surpassing numbers recorded in any year so far. The report comes a mere three months after Pitchbook <a href="https://pitchbook.com/news/articles/crypto-startups-post-record-quarter-as-opportunities-abound">disclosed</a> that investments worth $3 billion have gone into <keyword id="6357017" type="DEFINITION" weightage="20" keywordseo="cryptocurrency">cryptocurrency</keyword> and blockchain startups in the first quarter of 2021, from January to March. However, only a very small part of these investments seems to be flowing into Indian crypto companies. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve Crypto investments are happening in India too — just on a smaller scale While the country still <a href="https://www.businessinsider.in/cryptocurrency/news/wazirx-zebpay-crypto-and-others-are-setting-up-their-own-self-regulation-board-in-india/articleshow/83203195.cms">grapples with regulations</a>, foreign funds are scooping up the early benefits of startups founded by Indians in the blockchain ecosystem, while local investors are still wary. For instance, Dubai-based crypto investment fund FD7 Ventures had <a href="https://www.vccircle.com/crypto-fund-fd7-ventures-launches-250-mn-micro-fund-in-india/">launched</a> a $250 million micro-fund in India in March, meant to invest in altcoin projects like Polkadot and Cardano. And, India’s Polygon — an Ethereum based blockchain firm — also <a href="https://www.businessinsider.in/cryptocurrency/news/mark-cuban-invests-in-indian-ethereum-platform-polygon/articleshow/82967154.cms">received</a> a ‘sizable investment’ from billionaire Mark Cuban last month. But, companies in the country only received 0.2% of the $5.5 billion invested in blockchain startups globally, according to a whitepaper published by think tank <a href="https://www.indiatech.org/wp-content/uploads/2021/05/IndiaTech.org_Crypto_Decoder_2021.pdf">IndiaTech</a> in May. Firms like Polygon are built on public blockchain systems, like Ethereum, which will directly be affected if regulators crack down too hard on crypto. However, even if you consider the fact that India’s crypto trading industry isn’t considered to be the most relevant in the global scheme of things, the data suggests that the overall industry is <a href="https://forum.businessinsider.in/t/cryptocurrencies-bubble-or-booming-opportunity/77">simply too big to fail now</a>. Too big to fail? To be clear, a large part of the current global growth of $17 billion has come from a single deal, as pointed out by Bloomberg. Blockchain company Block. One struck a massive $10 billion funding round led by billionaires Peter Thiel, Alan Howard and Louis Bacon. However, it’s hard to ignore the fact that the crypto industry is slowly becoming too big to fail. In April, many pointed out how Coinbase’s listing on the NASDAQ exchange could be the watershed moment for the industry. The world’s largest <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">crypto exchange</a> saw a <a href="https://economictimes.indiatimes.com/tech/tech-bytes/coinbase-heads-for-91-billion-valuation-as-indicative-share-price-surges/articleshow/82069923.cms">massive</a> $100 billion-plus initial public offering (IPO) on the exchange. It grew 31% in about a month after that, and though it has registered drops too, it brought investor interest to crypto and blockchain firms, unlike any previous iterations. Around the same time as Coinbase’s successful listing, big money investment firm Tiger Global made a <a href="https://www.businessinsider.in/business/startups/news/tiger-global-makes-its-first-crypto-investment-in-india-making-coinswitch-kuber-worth-half-a-billion-dollars/articleshow/82197893.cms">sizable investment</a> in the Indian crypto exchange CoinSwitch Kuber. The company <a href="https://www.business-standard.com/article/companies/tiger-global-makes-its-first-india-cryptocurrency-firm-investment-121042201345_1.html">raised</a> $25 billion in a Series B round that was led by Tiger Global. The American investment firm’s interest raised CoinSwitch’s value to $500 million, putting it amongst the top exchanges in a country that is comparatively new to the industry, but a hub for blockchain development worldwide. It’s about more than just the ‘monetary value’ of cryptocurrencies Sure, countries would want to retain their <a href="https://www.businessinsider.in/cryptocurrency/news/el-salvadors-bitcoin-experiment-is-gaining-momentum-even-if-the-world-bank-doesnt-want-to-lend-its-support/slidelist/83634654.cms">monetary sovereignty</a>, but cryptocurrencies aren’t your day-to-day assets either. Ether, the token that powers the Ethereum blockchain, gains from each new application that’s developed using its underlying technology. According to the decentralized apps (Dapps) tracking platform <a href="https://www.stateofthedapps.com/stats/platform/ethereum">State of Dapps</a>, the Ethereum chain has been registering as many as 3,800 new apps per month. Decentralized apps include games, payments apps, social networks, and more that are built on blockchain platforms. One could argue that 3,800 Dapps per month is a small number in the larger scheme of things, but that’s exactly the kind of thing that <a href="https://forum.businessinsider.in/t/cryptocurrencies-bubble-or-booming-opportunity/77">grows fast</a> with investor interest. After all, Facebook was one among a few when it became big, but social media is without a doubt one of the biggest industries today. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/crypto-prices-tumble-as-experts-warn-about-impending-death-cross/articleshow/83713427.cms">Crypto prices tumble as experts warn about impending ‘death cross’</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/bitcoins-hash-rate-drops-to-a-six-month-low-after-china-shuts-nearly-90-of-its-bitcoin-mining/articleshow/83712677.cms">Bitcoin’s hash rate drops to a six-month low after China shuts nearly 90% of its bitcoin mining</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/ecommerce/news/flipkart-and-amazon-may-not-be-able-to-do-flash-sales/articleshow/83737670.cms">Amazon, Flipkart and other e-commerce platforms may not be able to do flash sales any more, if Indian government has its way</a>

Investments in crypto hit a new record of $17 billion, but Indian funds are yet to jump on the bandwagon

<ul><li>The Indian Parliament’s Winter Session has drawn to a close with no cryptocurrency bill making it to the fore.</li><li>The government has not yet confirmed if the proposed cryptocurrency regulations will be slated to come up during the next session of Parliament, which will kick off in February.</li><li>According to Finance Minister <keyword id="129243" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword>, the pending cryptocurrency bill is still waiting on the green light from the Cabinet, India’s highest decision making body.</li></ul>The Indian government was slated to introduce new regulations for cryptocurrency during the Winter Session of Parliament, which kicked off on November 29. The session has ended and the cryptocurrency bill did not make it to the table. This is the second time that the ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ was listed on the agenda but got deferred. The last time around was during the Budget Session of Parliament, in February. According to the Finance Minister, Nirmala Sitharman, the proposed rules are still waiting on the sign off for the <a href="https://www.businessinsider.in/cryptocurrency/news/india-crypto-bill-waiting-on-approval-from-pm-modi-before-parliament-discussion-can-happen/articleshow/88206954.cms">Cabinet</a>, India’s highest decision making body. She also confirmed that the pending <keyword id="10822352" type="General" weightage="20" keywordseo="crypto-bill" source="Orion">crypto bill</keyword> is most definitely <a href="https://www.businessinsider.in/cryptocurrency/news/india-crypto-bill-gets-a-revamp-but-its-still-a-work-in-progress-says-finance-minister-nirmala-sitharaman/articleshow/88001952.cms">different</a> from its 2019 iteration, which banned all crypto-related activities in the country. <div type="Article" hostid="261" msid="88384965" title="India’s crypto bill may take a page out of the new IT rules and ask exchanges to appoint a grievance officer" mstype="2" mssubtype="0"></div> However, the government has been mum on why it’s taking so long for the crypto bill to get the green light. India’s central bank, the Reserve Bank of India (RBI), has been pushing back with the governor, Shaktikanta Das, reiterating that the institution has ‘grave concerns’ when it comes to cryptocurrencies and has communicated the same to the government. <div type="ExtQuote" text="Cryptocurrencies are a serious concern to the RBI from a macroeconomic and financial stability standpoint. As the central banker, we have serious concerns about it and we have flagged it many times." auname="RBI Governor, Shaktikanta Das, said in November"></div> According to a report by the <a href="https://economictimes.indiatimes.com/news/economy/policy/in-favour-of-complete-ban-on-cryptos-rbi-to-central-board/articleshow/88350099.cms">Economic Times</a>, the RBI told its board that it’s in favour of a complete ban on cryptocurrencies earlier this week. <cmsannotation type="cmsannotation" annotationid="New crypto bill or no bill at all?" comment="subhead" text="New crypto bill or no bill at all?">New crypto bill or no bill at all?</cmsannotation> Rameesh Kailasam, the CEO of the advisory body IndiaTech, believes that it’s entirely possible that India may not bring out a separate bill for crypto if the respective changes are made in different laws that already exist — like the ones to monitor money laundering and overseeing international transactions. “However if a separate law is being written it will still require to go through a process of writing, law ministry approval, cabinet note, introduction into Parliament, debate and passing in both houses, presidential assent before things come into shape. It will still require respective changes in all relevant laws and rules. So ideally we may be looking at the budget session when things likely may come alive on this fully,” he told Business Insider. According to <a href="https://www.businessinsider.in/cryptocurrency/news/heres-what-the-government-has-been-discussing-behind-closed-doors-as-it-looks-to-regulate-crypto-in-india/articleshow/88311964.cms">insiders</a>, the current version of the bill only addresses trading into cryptocurrencies and how crypto exchanges should be regulated. “The government’s focus is very much on the speculation side of the things, and the trading side of the things — to some degree money laundering and financial stability,” said Tanvi Ratna, the founder of Policy 4.0, who has also been advising the government on the crypto bill. And, while that does address the issue of investor protection, it leaves a large part of the crypto universe — the foundational part where the actual use cases are emerging — out of the loop. “Most of the CAs in India don’t know how to report crypto in the books of their clients. This is not something that will happen overnight. I believe a proper set of regulations will take more than three years,” Siddharth Sogani, the founder and CEO of CREBACO, told Business Insider during a webinar sponsored by WazirX. <div type="Youtube" id="HJQCQx29L4g" title="Crypto: Risks, Rewards And Regulations" thumbUrl="https://i.ytimg.com/vi/HJQCQx29L4g/mqdefault.jpg"></div> According to Ratna, the debate behind closed doors is still raging over issues like the scope of the bill — the various aspects that will be regulated, including new nuances like a wallet, custodians, etc — the manner of regulation and whether or not there needs to be a specific regulation for cryptocurrencies in the first place. Regulation for cryptocurrencies, light-touch or stringent, gives the industry legitimacy. “This is going to be a phased process. You are right now going to see one set of regulations, which will deal with a very limited set of issues,” said Ratna. The government has not yet confirmed whether the cryptocurrency bill will feature in the next set of bills to be discussed during the Budget Session of Parliament, in February. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/chinas-state-run-news-agency-will-issue-nfts-as-the-government-cracks-down-on-crypto/articleshow/88438043.cms">China's state-run news agency will issue NFTs as the government cracks down on crypto</a> <a href="https://www.businessinsider.in/cryptocurrency/news/shiba-inu-spiked-13-after-a-crypto-whale-bought-4-trillion-of-the-meme-tokens/articleshow/88438316.cms">Shiba inu spiked 13% after a crypto whale bought 4 trillion of the meme tokens</a> <a href="https://www.businessinsider.in/cryptocurrency/news/a-co-founder-of-the-sandbox-explains-what-on-earth-is-going-on-in-the-metaverse-where-land-is-selling-for-millions-and-snoop-dogg-is-hanging-out/articleshow/88226561.cms">A co-founder of The Sandbox explains what on earth is going on in the metaverse — where land is selling for millions and Snoop Dogg is hanging out</a>

India ends Winter Session of Parliament with no crypto bill in sight

<ul><li>Indian Minister Pankaj Chaudhary told the Parliament that when it comes to crypto scams and frauds, India’s existing laws like the <keyword id="75223" type="ORGANIZATION" weightage="20" keywordseo="Indian-Penal-Code">Indian Penal Code</keyword> are equipped to handle the fallout.</li><li>The Indian government is yet to form a policy addressing the use of cryptocurrencies in the country.</li><li>In the meantime, the popularity of digital coins has been increasing, along with scams and frauds promising investors ‘get rich quick’ schemes.</li></ul>The status of <keyword id="6357017" type="DEFINITION" weightage="20" keywordseo="cryptocurrency">cryptocurrency</keyword> may be uncertain in India but the Indian Penal Code (IPC) and other laws are equipped to handle scams and frauds, according to Uttar Pradesh’s Minister of Finance, Pankaj Chaudhary. In response to a query in the lower house of Parliament by Member of Parliament Shashi Tharoor, Chaudhary replied, “Depending on the nature of the fraud, various laws including the Indian Penal Code 1860, are in place of protection against fraud.” The number of scams and frauds related to Bitcoin and other cryptocurrencies have increased over the last couple of years in India, mostly due to the rising popularity of trading in digital money, which offers the allure of multiplying your money. <cmsannotation type="cmsannotation" annotationid="Rising crypto scams in India" comment="subhead" text="Rising crypto scams in India">Rising crypto scams in India</cmsannotation> According to <a href="https://www.ndtv.com/india-news/enforcement-directorate-arrests-cryptocurrency-trader-in-chinese-online-betting-scam-case-2337549">CoinTelegraph</a>, Indian investors lost almost $500 million to scams being operated in India and abroad. And, scammers are getting smarter than ever to acquire other people’s cryptocurrency. Last year, Naisar Kothari — a resident of Bhavnagar in the state of Gujarat — was arrested under the Prevention of Money Laundering Act (<a href="https://www.ndtv.com/india-news/enforcement-directorate-arrests-cryptocurrency-trader-in-chinese-online-betting-scam-case-2337549">PMLA</a>). According to the Enforcement Directorate (ED), Kothari helped companies buy cryptocurrencies, transfer the amounts into wallets on foreign exchanges. The money was then used to illegally run online betting apps on websites. Since online betting is illegal in the country, these websites were hosted from outside india — in some cases, the operators were Chinese nationals, as per the ED. "It was found that Kothari had knowingly and actively involved himself in layering the proceeds of crime and hence he was arrested...," said the statement. In another instance, three companies based out of Bengaluru are being investigated for launching a fake initial coin offering (ICO) for a token called <a href="https://coingeek.com/morris-coin-founder-arrested-in-india-over-alleged-digital-currency-scam/">Morris Coin</a>. According to the authorities, they duped 11 lakh people to invest ₹15,000 each in Morris Coin. Nishad, a 36-year old man who is the CEO of all three companies, was arrested by the Malappuram police in Kerala under the Prize Chits and Money Circulation Schemes (Banning) Act in September 2020. <cmsannotation type="cmsannotation" annotationid="The Indian government is in the dark about crypto activity in the country" comment="subhead" text="The Indian government is in the dark about crypto activity in the country">The Indian government is in the dark about crypto activity in the country</cmsannotation> Chaudhary also reiterated the stance of Indian Finance Minister, <a href="https://www.businessinsider.in/cryptocurrency/news/the-indian-government-has-no-data-on-how-many-crypto-exchanges-and-investors-working-on-cryptocurrency/articleshow/84821709.cms">Nirmala Sitharaman</a>, by telling the parliament that the authorities currently do not have any data on the status of crypto trading in India. <div type="ExtQuote" text="This information [status of cryptocurrency trading in India] is not collected by the government." auname="Response by Minister of State for the Ministry of Finance, Pankaj Chaudhary in Lok Sabha, India’s lower house of Parliament"></div> The country’s crypto bill, which was expected first during the Budget Session of Parliament in February and again during the ongoing Monsoon Session of Parliament, is still pending approval from the cabinet. According to IndiaTech.org CEO Rameesh Kailasam, the government may be softening its stance against cryptocurrencies in the country. “The government seems to be still in the process of determining the way forward, which may through either an existing committee or a new one with industry consultation where required,” he told Business Insider in an <a href="https://www.businessinsider.in/cryptocurrency/news/indias-crypto-bill-is-unlikely-to-be-up-for-discussion-this-month-and-it-may-be-a-while-before-we-see-it-in-parliament/articleshow/84401863.cms?utm_source=google_newsstand&amp;utm_medium=google_rssfeed&amp;utm_campaign=news_referral">earlier interview</a>. But for now, the regulators seem to be undecided. “The [Indian] government does not consider cryptocurrencies legal tender or coin, and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system,” said Chaudhary. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/cambodia-is-leading-the-race-to-launch-a-centralised-cryptocurrency/articleshow/85065661.cms">Cambodia doesn’t want to depend on the dollar anymore — and its centralised cryptocurrency already has 5.9 million users</a> <a href="https://www.businessinsider.in/cryptocurrency/news/google-is-allowing-crypto-ads-again/articleshow/85033865.cms">Google is bringing back crypto ads — but is leaving a lot of crypto companies out of the loop</a> <a href="https://www.businessinsider.in/cryptocurrency/news/crypto-billionaire-monero-developer-fluffypony-riccardo-spagni-arrested-for-cookie-fraud/articleshow/85007386.cms">Monero’s ‘Fluffypony’ joins Ross Ulbricht and Arthur Hayes behind bars — but for a non-crypto crime</a>

Indian Penal Code and other laws have provision to protect investors against cryptocurrency fraud, according to Indian Finance Ministry official

<ul><li><keyword id="6986952" type="UNKNOWN" weightage="20" keywordseo="IDFC-First-Bank">IDFC First Bank</keyword> has temporarily halted services to crypto companies as it explores ‘enhanced due diligence.’</li><li>IDFC First Bank isn't the only one, as ICICI Bank, Yes Bank, and Paytm Payments Bank have taken similar decisions since May.</li><li>Cryptocurrencies were banned by the Reserve Bank of India (RBI) in 2018, but India’s top court overturned the decision in 2020.</li><li>For banks, cryptocurrencies are a concern since they're often a preferred instrument for money laundering, illegal purchases, and transactions relating to contraband.</li></ul>A host of Indian banks are reluctant to service the crypto industry and have opted to take matters into their own hands even though there is no official ban in place. The latest institution to reportedly join the bandwagon is IDFC First Bank. It has halted services to crypto companies sometime during the last one week, sources told <a href="https://www.livemint.com/companies/news/now-idfc-first-bank-halts-banking-services-to-crypto-industry-11624537138102.html">Livemint.</a> The report claims that the move is temporary while the bank explores 'enhanced due diligence’ regarding banking support to <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">crypto</a> exchanges. IDFC First Bank isn't the only one to keep its distance from the volatile markets. ICICI Bank, Yes Bank, and Paytm Payments Bank have taken similar decisions since May. Big wigs HDFC Bank and State Bank of India (SBI) have also cautioned their users against the risks of dealing in unregulated digital currencies like <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">Bitcoin</a>. Such moves further add to the confusion for customers who are caught in the middle. The banks’ decisions are internal with no transparency or any direct communication that alerts users to the change. There’s no official ban on cryptocurrencies in India, and the RBI has confirmed it Last month, the RBI <a href="https://www.businessinsider.in/cryptocurrency/news/rbi-2018-cryptocurrency-circular-not-valid-crypto-exchanges-wazirx-say-deposits-should-resume-soon/articleshow/83117245.cms">clarified</a> that banks and other regulated entities should not cite its <a href="https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NOTI15465B741A10B0E45E896C62A9C83AB938F.PDF">April 2018 order</a> banning banks from engaging with virtual currencies. The directive no longer holds true as it was set aside by the <a href="https://www.businessinsider.in/finance/news/cryptocurrency-in-india-is-legal-but-a-pending-bill-with-the-government-could-change-things/articleshow/74521104.cms">Supreme Court of India</a> in 2020. Since then, the crypto industry has been entirely unregulated, <a href="https://markets.businessinsider.com/currencies/news/india-central-bank-lenders-cryptocurrency-exchanges-traders-rbi-bitcoin-ban-2021-5-1030426343">making it tricky</a> for regulated financial players to decide the end outcome. For banks, <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">cryptocurrencies</a> are a concern since they're often a preferred instrument for money laundering, illegal purchases, and transactions relating to contraband. While RBI's clarification gave relief to crypto investors, banks are caught in the middle as they can neither entirely support crypto nor claim absolute immunity from its future fallouts or issues. <h2 style="line-height:1.38;margin-top:0pt;margin-bottom:0pt;">Self-regulation is the only short-term solution for exchanges</h2> As the Indian government mulls over whether or not to bring in new laws to deal with cryptocurrencies, <keyword id="6422582" type="UNKNOWN" weightage="20" keywordseo="Crypto-Exchanges">crypto exchanges</keyword> have <a href="https://www.businessinsider.in/cryptocurrency/news/wazirx-zebpay-crypto-and-others-are-setting-up-their-own-self-regulation-board-in-india/articleshow/83203195.cms">agreed</a> to self-regulation under the patronage of the Internet and Mobile Association of India (IAMAI). It includes a code of conduct that will see all crypto exchange members voluntarily complying with KYC, tax and other norms. Crypto exchanges are also <a href="https://www.businessinsider.in/cryptocurrency/news/indian-crypto-exchanges-are-eyeing-more-industry-bodies-to-expand-influence/articleshow/83742929.cms">reportedly</a> setting up a second lobby — of which Zebpay is a confirmed member — under the helm of IndiaTech, an industry body representing the country's leading internet startups like Ola, MakeMyTrip, Nykaa, Dream11, and more. With a formal setup, the board and exchanges will develop protocols to accommodate regular audits and inspections, customer redressal mechanism, and fraud protection. The collective effort, they claim, will also help crypto exchanges keep an eye out for money laundering, illegal transactions, and more. It's <a href="https://fortune.com/2021/06/02/india-bitcoin-ban-crypto-exchange-investors-crackdown-rbi/">estimated</a> that India has 15 million crypto investors with ₹10,000 crore worth of digital assets. For an industry that has zero regulations, that's a lot of money at stake. Even though cryptocurrencies are a concern, the underlying technology of blockchain is being welcomed. Recently, 15 private and state-run banks <a href="https://www.businessinsider.in/cryptocurrency/news/sbi-hdfc-icici-and-12-others-banks-are-joining-forces-to-use-blockchain-to-power-letters-of-credit-a-move-that-could-be-a-boon-for-msmes/articleshow/83570874.cms">teamed up</a> in India to form a new group called Indian Banks' Blockchain Infrastructure Company Private Limited (IBBIC). Initially, they plan to process Letters of Credit (LCs), GST invoices, and e-way bills via blockchain to help speed up the existing system. <a target="_blank" class="c-link" href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/heres-how-chinas-2021-crypto-crackdown-in-2021-differs-from-the-2017-ban/articleshow/83802778.cms">Here’s how China’s 2021 crypto crackdown in 2021 differs from the 2017 ban</a> <a href="https://www.businessinsider.in/business/startups/news/zomato-is-seeking-a-8-billion-valuation-in-its-ipo-does-it-make-sense/articleshow/83801848.cms">There are a few reasons why Zomato wants $8 billion valuation from its IPO -- here's a look at if it makes sense</a>

IDFC First Bank joins ICICI Bank, Yes Bank and others in stopping services to crypto companies, despite RBI's nudge to ignore its 2018 order

<ul><li>The former governor of the Reserve Bank of India (<keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>), <keyword id="6358908" type="General" weightage="20" keywordseo="raghuram-rajan" source="Orion">Raghuram Rajan</keyword>, believes that only a handful of <keyword id="2721952" type="General" weightage="20" keywordseo="crypto" source="Orion">crypto</keyword>currencies will survive the crypto hype.</li><li>Over 400 coins have hit the dust since April, translating to a 20% increase in six months.</li><li>Aritra Sarkhel, the Direct of Public Policy at the Indian crypto exchange WazirX, told Business Insider that it is a point of concern that there no laws on how and who can mint a new coin.</li></ul>The former governor of India’s central bank, Raghuram Rajan, believes that only a handful of cryptocurrencies will survive in the long run. In an interview with CNBC, he compared cryptocurrencies to chit funds — in the sense that they take money from people before going bust, leaving a line of disappointed investors in their wake. <div type="ExtQuote" text="Crypto may pose the same problem as unregulated chit funds which take money from people and go bust, a lot of people holding crypto assets are going to be aggrieved." auname="Former RBI governor, Raghuram Rajan, said in an interview with CNBC"></div> According to <a href="https://www.coinopsy.com/dead-coins/#other">Coinospy</a>, a website that tracks <keyword id="12608232" type="General" weightage="20" keywordseo="dead-coins" source="Orion">dead coins</keyword>, over 2,000 coins have come and gone since the very first cryptocurrency, Bitcoin, was created in 2009. OneCoin and BitConnect, for instance, used money from new investors to pay returns to existing holders — much like the Sahara Group Chit Fund Scam, which is one of the biggest corporate scams in India’s history. A more recent example is Squid Game token. In a ‘<a href="https://www.businessinsider.in/cryptocurrency/news/squid-game-cryptocurrency-trading-at-to-0-scammers-make-2-1-million/articleshow/87479063.cms">rug pull</a>’ scam, the developers took the project offline once it hit a price of $2,861, making off with over $2.1 million. In April, Coinospy reported that the number of coins to hit the dust had grown by over 35% as compared to the previous year with the tally at 1,949. Since then, that number has grown to 2,345 — a 20% increase in six months. <cmsannotation type="cmsannotation" annotationid="The lack of regulation leaves space for fraud" comment="subhead" text="The lack of regulation leaves space for fraud">The lack of regulation leaves space for fraud</cmsannotation> Experts have often talked about the need of balancing innovation versus regulation when it comes to crypto space. And, one of the main concerns is how to foster good use cases and filter out those that are fraudulent. “There are no laws to keep anyone from making a new coin. In a way, that’s good because that’s how innovation spreads, but there has to be some law. All of this has investors money [at stake] — whether it’s a 20 year old investor putting in ₹1,000 or a massive hedge fund putting in millions,” Aritra Sarkhel the Direct of Public Policy at the Indian crypto exchange WazirX, told Business Insider during a discussion on regulation in India. <div type="Youtube" id="f-xWw1y6G24" title="The Framework: Crypto Regulation And India" thumbUrl="https://i.ytimg.com/vi/f-xWw1y6G24/mqdefault.jpg"></div> According to Rajan, blockchain technology itself is not the enemy. Despite the regulatory challenges, he believes that the Indian government should allow blockchain to flourish because it makes transactions cheaper, especially when it comes to cross border payments like remittances. But, that doesn’t mean the government should turn a blind eye either. “What governments can insist on is getting information from crypto entities, when crypto entities get too big, the government can examine them more closely to ensure there isn’t fraud,” he told CNBC. <cmsannotation type="cmsannotation" annotationid="Indian amid forming its own laws to regulate cryptocurrencies" comment="subhead" text="Indian amid forming its own laws to regulate cryptocurrencies">Indian amid forming its own laws to regulate cryptocurrencies</cmsannotation> The Indian government is <a href="https://www.businessinsider.in/cryptocurrency/news/india-new-crypto-bill-threatens-to-ban-private-cryptocurrencies/articleshow/87874900.cms">expected</a> to discuss its own crypto regulations during the Winter Session of Parliament, which will kick off next week on November 29. No official draft of the proposed crypto bill has been shared with the public yet, however the agenda lists the crypto bill as one that will provide a framework for a central bank digital currency (CBDC) and ‘prohibit’ the use of ‘private’ cryptocurrencies subject to certain ‘exceptions’. <div type="image" title="crypto bill agenda" msid="87913982" hostid="261" caption="&amp;lt;p&amp;gt;India&amp;#39;s crypto bill is listed to come up for discussion during the Winter Session of Parliament in the lower house, the Lok Sabha, which kicks off on November 29&amp;lt;/p&amp;gt;"></div> The vague wording of the bill’s introduction led to panic selling on Indian crypto exchanges leading to a <a href="https://www.businessinsider.in/cryptocurrency/news/fud-takes-over-indian-crypto-markets-after-government-lists-crypto-bill-for-discussion/articleshow/87891795.cms">cryptocurrencies trading at a discount</a> in INR as compared to the US dollar. “While there are speculations that the government would impose a blanket ban on all private cryptocurrency, it doesn’t seem practical on account of various considerations,” explained L. Badri Narayanan, an executive partner at law firm Lakshmikumaran and Sridharan Attorneys. According to him, a ban would not be technologically enforceable since blockchains need cryptocurrency to function. Moreover, those who want to trade or invest in cryptocurrencies would just find another way to do so and inevitably create a grey market. “Bans only send folks underground. All technologies have pros and cons. We should work towards creating policies for managing the ills while reaping the benefits,” Dr.Sarabjot Singh Anand, the director of computer science and engineering at the BML Munjal University’s School of Engineering &amp; Technology, told Business Insider. The crypto bill had earlier been listed for discussion during the <a href="https://www.businessinsider.in/finance/news/indian-cryptocurrency-players-in-huddle-as-government-mulls-ban/articleshow/80610668.cms">Budget Session of Parliament</a> in February, however, it did not come to fore due to lack of time and the second wave of COVID-19. This time around those within the crypto community are hoping that won’t be the case with multiple closed-door discussions between stakeholders and the Ministry of Finance in the last 10 months. “Parliamentarians are a lot more informed than they were in February or last year. You will likely see a debate, and a healthy one. Also, there are other bills and business listed in Parliament — and it all depends on how much time the government spends on other items, which are also important,” the CEO of the advocacy group IndiaTech — which has been advising the Indian government on crypto regulation — Rameesh Kailasam, told Business Insider. SEE ALSO: <a href="https://www.businessinsider.in/investment/news/heres-a-quick-look-at-how-the-evolution-of-cryptocurrencies-has-played-out-in-india/slidelist/87902549.cms">India’s crypto regulations have been caught in limbo — here’s how the past few years have played out</a> <a href="https://www.businessinsider.in/cryptocurrency/news/fud-takes-over-indian-crypto-markets-after-government-lists-crypto-bill-for-discussion/articleshow/87891795.cms">FUD takes over Indian crypto markets after government lists crypto bill for discussion</a> <a href="https://www.businessinsider.in/investment/news/what-does-private-cryptocurrency-mean-in-india/articleshow/87887473.cms">Privacy coins, centralised cryptocurrencies, or being currencies — India is yet to explain what it means by ‘private’ cryptocurrency</a>

Raghuram Rajan believes only a handful of cryptocurrencies will survive the hype — over 400 tokens have hit the dust in the last six months

<ul><li>India’s Finance Minister Nirmala Sitharaman reiterated that the country’s new laws around cryptocurrencies are currently awaiting approval from the Union Cabinet.</li><li>The Union Cabinet is India’s highest decision-making body.</li><li>However, this does not necessarily mean that the new laws will come into existence any time soon.</li></ul>India is racing to keep up with the cryptocurrency craze in the country. India’s Finance Minister Nirmala Sitharaman reiterated that the new regulations around cryptocurrencies in India — the Cryptocurrency and Regulation of Official Digital Currency Bill, 2019 — are waiting on approval from the Cabinet before it can be introduced into the Parliament. She had <a href="https://www.businessinsider.in/cryptocurrency/news/indias-new-crypto-regulations-are-ready-for-the-monsoon-session-of-parliament-according-to-sitharaman/articleshow/84168068.cms">stated</a> this earlier as well, ahead of the Monsoon Session in July this year. The Union Cabinet is India’s highest decision-making body. Only the Prime Minister, Narendra Modi, and other ministers of rank are a part of the Cabinet. The supreme body needs to give the green light before the new laws can be introduced for debate in Parliament. <div type="ExtQuote" text="Cabinet note is ready on cryptocurrency. I am awaiting [sic] Cabinet to clear that." auname="India’s Finance Minister Nirmala Sitharman told reports on August 18"></div> Those in the know, requesting to remain anonymous, told Business Insider that the government is most likely mulling over a softer stance given the recent surge in <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite&amp;is_retargeting=false&amp;shortlink=BI&amp;c=site&amp;pid=Business%20Insider&amp;af_click_lookback=7d&amp;af_channel=Business%20Insider&amp;af_adset=article&amp;af_force_deeplink=true">crypto</a> adoption and awareness within the country. This means that it's possible that the Cabinet will not approve the bill in its current form, as seen in the <a href="https://www.businessinsider.in/finance/news/indian-cryptocurrency-players-in-huddle-as-government-mulls-ban/articleshow/80610668.cms">draft</a> ahead of the Budget Session of Parliament in February. The <a href="https://www.businessinsider.in/stock-market/news/bitcoin-has-surged-to-a-record-60000-as-stimulus-hopes-and-big-name-backers-fuel-demand/articleshow/81486473.cms?utm_source=msn&amp;utm_medium=referral&amp;utm_campaign=msn_content_partnership">massive surge</a> in Bitcoin’s price earlier this year, coupled with <a href="https://www.businessinsider.in/finance/news/rbi-inflation-forecast-for-next-year-is-high-close-to-shaktikanta-das-target/articleshow/85092332.cms">high inflation</a>, has led young investors to invest in <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite&amp;is_retargeting=false&amp;shortlink=BI&amp;c=site&amp;pid=Business%20Insider&amp;af_click_lookback=7d&amp;af_channel=Business%20Insider&amp;af_adset=article&amp;af_force_deeplink=true">cryptocurrencies</a> as an alternative financial instrument, despite their reputation for being heavily volatile. This is partly due to <keyword id="2721952" type="PERSON" weightage="20" keywordseo="crypto">crypto</keyword> exchanges like WazirX, CoinDCX, CoinSwitch Kuber, and others garnering new funding. And that funding is going towards <a href="https://www.businessinsider.in/cryptocurrency/news/wazirx-coindcx-and-other-indian-crypto-exchanges-will-reportedly-have-new-advertisement-guidelines-in-the-next-seven-to-ten-days/articleshow/84756896.cms">heavy-weight sponsorships</a> in the mainstream — like the Euro Cup and the T20 cricket tournament between Sri Lanka and India — which is driving awareness among the masses. <cmsannotation type="cmsannotation" annotationid="What happens if the Cabinet does not approve India's crypto bill?" comment="subhead" text="What happens if the Cabinet does not approve India's crypto bill?">What happens if the Cabinet does not approve India's crypto bill?</cmsannotation> If the bill is rejected by the Cabinet, then it’s possible that things will have to start from scratch all over again, especially if the Indian government is looking to take a softer approach to cryptocurrencies. “The government seems to be still in the process of determining the way forward, which may through either an existing committee or a new one with industry consultation where required," Rameesh Kailasam, the CEO of IndiaTech, told Business Insider in an <a href="https://www.businessinsider.in/cryptocurrency/news/indias-crypto-bill-is-unlikely-to-be-up-for-discussion-this-month-and-it-may-be-a-while-before-we-see-it-in-parliament/articleshow/84401863.cms">earlier interview</a>. The way the passing of a bill works in India is that a committee is assigned to draft the bill. The committee is headed by one, or in this case, multiple ministries. Given the vast application of cryptocurrencies — even though the Ministry of Finance’s Department of Economic Affairs is leading the charge — other stakeholders like the Ministry of Electronics and Information Technology (MeitY), the Securities and Exchange Board of India (SEBI), and the Reserve Bank of India also are a part of the process. Once the committee has drafted the bill, it then needs to be approved by the Finance Ministry. Once they approve it, it goes over to the Ministry of Law for another layer of endorsement to ensure it ticks all the boxes and doesn’t include any language that could get the government into trouble. Only once the bill has cleared both those thresholds does it make its way to the Cabinet. The ministers then discuss the bill to ascertain if any changes are required. If they feel the bill isn’t up to the mark, it will be sent back to the Finance Ministry. If not, the bill is presented to the public for comments before being introduced into the lower house of Parliament, the Lok Sabha. They then have three readings of the bill before it is passed to the upper house, the Rajya Sabha. Even then, the bill nevertheless needs approval from the President before it is <a href="https://prsindia.org/files/parliament_track/1417684398--Parliament%20as%20a%20Law%20Making%20Body_0.pdf">eligible</a> to come into effect. Depending on the changes suggested, it’s possible that the bill may not clear the Cabinet approval stage of the process. They could request for the Finance Ministry and other stakeholders to form an entirely new committee to draft a new version of the bill. They could even ask for a change at the helm with a department other than the Department of Economic Affairs — that, however, is unlikely. “The government seems to be looking at this afresh considering that there needs to be a different take on how to regulate cryptocurrencies rather than push for an outright ban” said Kailasam. <cmsannotation type="cmsannotation" annotationid="How could a new crypto bill in India be different from the old one?" comment="subhead" text="How could a new crypto bill in India be different from the old one?">How could a new crypto bill in India be different from the old one?</cmsannotation> The original committee that drafted India’s crypto bill was headed by Finance Secretary Subash Chandra Garg. Other members included MeitY Secretary Ajay Prakash Sawhney, SEBI Chairman Ajay Tyagi, and RBI Deputy Governor BP Kanungo. The <a href="https://prsindia.org/billtrack/draft-banning-of-cryptocurrency-regulation-of-official-digital-currency-bill-2019">version</a> of the crypto bill proposed by them, the draft of which was released ahead of the Budget Session of Parliament in February, bans all ‘private’ cryptocurrencies and lays out a plan for India’s apex banking institution to launch its central bank digital currency (CBDC). <div type="ExtQuote" text="Under the draft Bill, mining, holding, selling, issuing, transferring or use of cryptocurrency is punishable with a fine or imprisonment of up to 10 years, or both." auname="Excerpt from the Draft Banning of Cryptocurrency &amp; Regulation of Official Digital Currency Bill, 2019"></div> The definition of ‘private’ cryptocurrencies was however ambiguous. Most speculate, as per the comments of RBI governor Shaktikanta Das, that this covers all cryptocurrencies traded on exchanges including Bitcoin, Ether, Dogecoin, and others. <div type="ExtQuote" text="The RBI has major concerns with respect to private cryptocurrencies. We have conveyed these concerns to the government. The government will examine the issue and act accordingly." auname="Reserve Bank of India (RBI) governor, Shaktikanta Das, during the RBI’s Monetary Policy press conference on 6 August 2021"></div> This, however, does not mean that the central bank is proposing to ban the underlying blockchain platforms. One can ban Ether but the Ethereum blockchain, which facilitates the implementation of smart contracts, does not necessarily have to be pulled down. But, if the government is looking to take a softer stance, in line with the Supreme Court’s judgement in 2020 that abolished the RBI’s ban on cryptocurrencies, a new bill will likely have to be drafted. And, that process will again take its own sweet time cutting through the red tape. This means, just because the crypto bill is awaiting approval from the Cabinet, that it’s a done deal — especially as more and more Indian citizens are investing in cryptocurrency. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/one-third-of-indians-hold-cryptocurrencies-and-youngsters-are-leading-the-charge/articleshow/85364856.cms">One third of Indians hold cryptocurrencies and youngsters are leading the charge, according to a new report</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/cricket-is-jumping-on-the-nft-bandwagon-heres-how-fans-can-splurge-on-digital-collectibles-in-the-sporting-world/slidelist/85302503.cms#slideid=85302611">Cricket is jumping on the NFT bandwagon — here’s how fans can splurge on digital collectibles in the sporting world</a>

India’s crypto bill will still have a few hurdles to clear before becoming a law, even if the Cabinet approves

Investments by India’s 15 million-strong crypto trading community spiked by 612% year-over-year, skyscraping from <a href="https://www.coindesk.com/india-bitcoin-crypto-investments-young-generation">$923 million in April 2020 to $6.6 billion</a> by the end of May this year. The data is a testimony to the fact that <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite&amp;is_retargeting=false&amp;shortlink=BI&amp;c=site&amp;pid=Business%20Insider&amp;af_click_lookback=7d&amp;af_channel=Business%20Insider&amp;af_adset=article&amp;af_force_deeplink=true">cryptocurrencies</a> are fast becoming a favored asset class amongst the millennials and Gen Z Indians who prefer Bitcoin over the conventional metals, property and stocks, for transparency and the growth it offers. “The growth trajectory (of crypto trading in India) is something which is very, very visible,” said Nischal Shetty, the CEO of <keyword id="6672551" type="UNKNOWN" weightage="20" keywordseo="wazirx">WazirX</keyword>. Out of the 70 million people who are currently into equity, <a href="https://forkast.news/video-audio/wazirx-ceo-indias-crypto-industry-keep-clean-for-regulators/">25% have already started investing in cryptocurrencies</a>. This notable shift in investing patterns among the Indians is pushing the crypto buzz in political corridors as well. <div type="image" title="IWC-copy" msid="84821027" hostid="261" caption="&amp;lt;p&amp;gt;It&amp;#39;s been 1000 days since WazirX started its crypto campaign in India on 1 November 2018 &amp;lt;/p&amp;gt;"></div><h2 style="line-height:1.38;text-align: justify;margin-top:18pt;margin-bottom:6pt;"><cmsannotation type="cmsannotation" annotationid="The ‘Cryptographic’ stance of the government" comment="subhead" text="The ‘Cryptographic’ stance of the government">The ‘Cryptographic’ stance of the government</cmsannotation> </h2>Until now, the Indian crypto trading space has been a laissez-faire arena propped up by market forces with minimal regulations in place. But that’s been changing as cryptocurrencies have gotten more popular with the masses. From the Reserve Bank of India’s (RBI) blanket ban on cryptocurrency trading in 2018, followed by the Supreme Court’s <a href="https://www.businessinsider.in/finance/news/cryptocurrency-in-india-is-legal-but-a-pending-bill-with-the-government-could-change-things/articleshow/74521104.cms">reversal</a> of the same two years later, to the talks of a proposed cryptocurrency regulation bill taking a <a href="https://www.businessinsider.in/cryptocurrency/news/indias-crypto-bill-is-unlikely-to-be-up-for-discussion-this-month-and-it-may-be-a-while-before-we-see-it-in-parliament/articleshow/84401863.cms">softer stance</a> — the government’s take on cryptocurrency has been progressively encouraging. This regulatory unclarity had the <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite&amp;is_retargeting=false&amp;shortlink=BI&amp;c=site&amp;pid=Business%20Insider&amp;af_click_lookback=7d&amp;af_channel=Business%20Insider&amp;af_adset=article&amp;af_force_deeplink=true">crypto exchanges</a> operating in India bogged down. However, soon after, RBI’s circular gave the industry some much-needed clarity. The government has been understandably concerned over the degree of anonymity that comes with cryptocurrencies. There have also been reports of possible use cases in terror financing, uncensored cross-border payments, and money laundering. To this argument, the Indian crypto community has a straightforward answer — don’t ban cryptocurrencies, but regulate the crypto space. <div type="ExtQuote" text="“India needs a dedicated department to regulate the crypto space. Not regulating them will only encourage the black market.”" auname="Sidharth Sogani, founder and CEO of Crebaco Global"></div> The recent months have brought some clarity over the stance of the government regarding crypto. There are talks underway of classifying cryptocurrencies as an asset class. Once cryptocurrencies pass the classification hurdle, their legislation would be overseen by the Securities and Exchange Board of India (SEBI), however, the report hasn’t been verified yet. There are reports in the media of RBI considering introducing its own CBDC in the near future and that an expert panel has already been put together to study the same. <h2 style="line-height:1.38;text-align: justify;margin-top:18pt;margin-bottom:6pt;"><cmsannotation type="cmsannotation" annotationid="What are the odds of crypto regulation in India?" comment="subhead" text="What are the odds of crypto regulation in India?">What are the odds of crypto regulation in India?</cmsannotation></h2>Over the past few months, there have been quite few positive signs from the Indian government with respect to digital assets. The first and the most important being the Finance Minister’s statement in March 2021 at the India Today Conclave. <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> clearly stated that the government isn’t "shutting off all the options," even as the RBI retains the power to take a call on whether or not it wants to issue a centralised bank digital currency (CBDC). Sitharaman also disclosed that the Centre will provide “adequate windows to experiment with bitcoins, blockchain, and cryptocurrency.” Meanwhile, the former Minister of State Finance Anurag Singh Thakur added that the government is in the process of collecting income tax on cryptocurrency earnings. The only catch is that the government currently maintains no records of the same and lacks the means to capture such information. Reports suggest that using overseas exchanges to trade in cryptocurrency may attract a 2% equalization levy on transactions. Alternatively, these exchanges might be required to pay an additional 18% tax if they are not based in India. Recently, the Ministry of Corporate Affairs made it mandatory for companies to declare their crypto investments held during the financial year. As we await the regulatory framework, one thing is for sure, the government’s stance on cryptos has evolved from a negative to one of a positive outlook. The government, contrary to the rumours of a trading ban, is gearing up to adopt a more lenient approach towards cryptos and is showing prominent signs of regulating the nascent industry via a calibrated approach, while keeping all the market players involved in the process. <h2 style="line-height:1.38;text-align: justify;margin-top:18pt;margin-bottom:6pt;"><cmsannotation type="cmsannotation" annotationid="The suggested regulatory mechanisms" comment="subhead" text="The suggested regulatory mechanisms">The suggested regulatory mechanisms</cmsannotation></h2>The technology lobby group, Indiatech.org, recently submitted a five-point proposal regarding cryptocurrency regulation to the Indian government. It posited that the idea of crypto as an asset class is more realistic than a legal tender. Countries like El Salvador that do not possess any native currencies are more suitable for cryptocurrency adoption as a legal tender. For countries like India, Bitcoin being <a href="https://www.coindesk.com/india-crypto-regulation-tanvi-ratna">‘akin to money’</a> (as posited by an ED investigation report) is an unlikely scenario. Further, to combat the confusion over foreign funds in crypto activities in India, the government could allow only Indian crypto exchanges with an FDI cap, of say 26%, in place in line with the banking norms. Concerning taxation, the report recommended the provision and treatment of gains from cryptos under the ‘Profit and Gains from Business and Profession’ head or ‘Income from Capital Gains’. With a robust know-your-customer (KYC)/ or anti-money laundering (AML) process in place, the provenance of crypto transactions via an exchange and the history of cross-border remittances via crypto can easily be attained. Certain recommendations by the Financial Action Task Force (FATF), when put in place, can help counter money laundering practices while implementing necessary safeguards against terror financing. If the government allows only those crypto-assets such as Bitcoin that give access to forensic analysis and could be subjected to certain law enforcement, most of the money laundering practices could be minimised. <h2 style="line-height:1.38;text-align: justify;margin-top:18pt;margin-bottom:6pt;"><cmsannotation type="cmsannotation" annotationid="The future of cryptocurrencies in India - the community perspective" comment="subhead" text="The future of cryptocurrencies in India - the community perspective">The future of cryptocurrencies in India - the community perspective</cmsannotation></h2>As of now, we can say that the Indian government isn’t in a state of crypto denial but at a stage where it is processing the nuances of accepting a digitized token, backed by a revolutionary technology. Surely, the government needs time mulling over an ‘asset class’, the inclusion of which would decide the future of other asset classes in the portfolio of the citizens, and ultimately, the financial economy as a whole. The world has already taken some progressive steps to regulate crypto, with countries like Japan having taken the lead in recognizing them years ago. The EU Commission too has introduced a directive on 'Markets in Crypto-assets' to regulate trading in crypto-assets and support digital finance in all EU states. All EU states have to follow the AML Directive 5 which has strict rules to combat money laundering. As a vigilant community of crypto enthusiasts, WazirX is intent upon building the necessary infrastructure to pioneer the next crypto boom as and when it arrives. Many organizations including WazirX, have taken the case upon themselves to structure a self-imposed code of conduct pursuant to a reasonable template of regulations that “replicates what exists in the traditional financial world”. Disclaimer: This is a sponsored post in partnership with WazirX. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/elon-musks-tesla-second-quarter-earnings-show-that-its-bitcoin-holding-cost-the-company-23-million-in-impairment/articleshow/84784933.cms">Bitcoin price slump cost Tesla $23 million — but the company still managed net profit of $1 billion</a> <a href="https://www.businessinsider.in/cryptocurrency/news/imf-remains-wary-of-cryptocurrencies-calls-legalisation-an-inadvisable-shortcut/articleshow/84790881.cms">Inadvisable shortcut, a step too far, and dire consequences — the IMF warns countries against using Bitcoin as a national currency</a> <a href="https://www.businessinsider.in/cryptocurrency/news/elon-musk-and-michael-saylor-had-the-most-influence-on-crypto-markets-over-the-last-three-months/articleshow/84789343.cms">Elon Musk and Michael Saylor’s influence on crypto markets have made it as volatile as the ‘crypto winter’ of 2017</a>

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The framework: Crypto regulation and India

Business Insider India

India's crypto bill is unlikely to be up for discussion this month — and it may be a while before we see it in Parliament

Prabhjote Gill

There’s a new Indian crypto lobby in the making and Zebpay has confirmed its participation

Shivam Vahia

WazirX got 377 requests from law enforcement agencies in the last 6 months

BI India Bureau

Investments in crypto hit a new record of $17 billion, but Indian funds are yet to jump on the bandwagon

BI India Bureau

India ends Winter Session of Parliament with no crypto bill in sight

Prabhjote Gill

Indian Penal Code and other laws have provision to protect investors against cryptocurrency fraud, according to Indian Finance Ministry official

Prabhjote Gill

IDFC First Bank joins ICICI Bank, Yes Bank and others in stopping services to crypto companies, despite RBI's nudge to ignore its 2018 order

Shivam Vahia

Raghuram Rajan believes only a handful of cryptocurrencies will survive the hype — over 400 tokens have hit the dust in the last six months

Prabhjote Gill

India’s crypto bill will still have a few hurdles to clear before becoming a law, even if the Cabinet approves

Prabhjote Gill

India's stance on cryptocurrencies is evolving as more investors join the bandwagon

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