India's cryptocurrency ban predicted to end by late 2018

Government and cryptocurrency community in discussions over introducing new regulatory measures separating cryptocurrency and blockchain

14Aug

India's battle against cryptocurrency will likely finally come to a long-awaited conclusion with the introduction of official regulatory measures by late 2018, according to Quartz India.

The country's complicated relationship with cryptocurrency began in April 2018 when the Reserve Bank of India (RBI) blacklisted cryptocurrency from financial institutions.

RBI explained its decision in a statement at the time: "It has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling cryptocurrencies."


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It added: "Regulated entities which already provide such services shall exit the relationship within a specified time."

However, following protests by investors and businesses affected by the ban, the RBI seemed to have made a U-turn in their decision when several government officials claimed the ban was a temporary measure.

Requesting anonymity at this time, a senior government official stated: "Blockchain is an interesting thing. We definitely want to milk it effectively for financial transactions. All officials are really trying hard to understand how to separately use blockchain, without cryptocurrency. And understanding a new software takes time."

According to Quartz India, the Indian government has been meeting with representatives of India's cryptocurrency community to aid understanding of the subject.

Commenting on the discussions, Ajeet Khurana, former head of the Blockchain and Cryptocurrency Committee, stated: "A public blockchain needs to have a token and you can’t have it by excluding cryptocurrencies. Moreover, a public blockchain is analogues to the internet and no one can control it."

While the discussions continue, excluding cryptocurrency is evidently problematic to blockchain applications, as Shubham Yadav, co-founder of Coindelta, a Pune-based cryptocurrency exchange, further explained: "If a common man is involved in a blockchain that can be used to mine or validate a particular transaction then it takes resources. The investors are then incentivized by paying in cryptocurrencies, so if these digital coins are removed from the equation then it doesn’t make sense."

There has been no official comment from the country's Finance Ministry as it debates how to treat blockchain and cryptocurrencies separately. 

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