India: New RTI response clarifies India’s stand on cryptocurrency regulation

India’s position on crypto has been in the gray owing to a lack of legal clarity on the part of the Indian government and its financial institutions. The latest development in the space was when the Reserve Bank of India (RBI) responded to a previously filed RTI (Right to Information) request, clarifying their non-involvement in drafting any crypto-related bills.

While the news came as some respite to crypto-enthusiasts in the country, a new development promises otherwise. According to a report, the Investor Education and Protection Fund (IEPF) Authority responded to an RTI request filed by CoinCrunch India, revealing that an inter-departmental committee in January had decided,

“Department of Revenue and Department of Economic Affairs may immediately take steps to completely ban sale, purchase and issuance of all forms and types of cryptocurrencies.”

The RTI response also highlighted that the committee, comprised of the IEPF, DEA, CBIC and MCA, had discussed the Ponzi Scheme features of cryptocurrencies. While numerous crypto-enthusiasts have questioned the government’s intent with regard to the crypto-ecosystem, this may be the first time a government body has accepted its part in cryptocurrency regulation.

It is important to note that IEPFA’s response focuses on the ban on sale, purchase and issuance of cryptocurrencies, while holding of crypto may be exempted. Additionally, no draft bill regarding a prospective ban on cryptocurrencies has yet been submitted to the Indian parliament, enabling Indian users to trade cryptocurrencies and crypto-assets freely.

This response also confirms the non-involvement of key players such as the RBI, India’s central bank, and the Securities and Exchange Board of India (SEBI) in the drafting of any such bill.

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