The Indian cryptocurrency sector is attempting to establish a conversation with regulatory bodies to help understand the space and provide advice in defining guidelines for the sector.
In a conversation today, Subhash Chandra Garg, the chairman of the Indian Inter-ministerial Committee [IMC] noted that cryptocurrency can be regulated as a commodity and not as a currency.
A big sign of clarity from Indian institutions
In a webinar organized by Khaitan & Co, CREBACO and BlockOn with Subash Chandra Garg, Garg's committee formulated a bill for the crypto sector suggesting a ban on virtual currencies in the country and severe punishment for those who use them.
Garg expressed the view that cryptocurrencies are fake and without intrinsic value. Garg explained the efficiency of the current payment system and added: "I don't think cryptography-based solutions will be cost effective."
However, Garg seemed to agree with the idea that cryptocurrency was an investment. Even the Central Bank of India has opposed the idea of a currency to replace Fiat. The president noted that if cryptocurrency wants to be considered a means of investment, it can be suitably "regulated and this would be a legitimate step to be implemented".
He added: “We must protect the most naive or unaware people. This public duty must be addressed and through this, the cryptocurrency community can thrive. "
This was a sign of relief for many, including Nazhal Shetty, CEO and founder of WazirX, who thought of this as a sign of clarity that was extremely necessary for the committee. The CEO noted that cryptocurrency is not a means of destroying the payment system and they are trying to "use it as an asset class".
A first step for regulators in India
If the cryptography regulation limits cryptocurrencies to trading (find out how here buy Bitcoins), Indian crypto users may not be able to use it in exchange for a service. There have been many countries compatible with Bitcoin, such as Japan, which have allowed their citizens to use Bitcoin as a medium of exchange.
However, as Sidharth Sogani, CEO of CREBACO said, "value comes from trust and consensus", regulators may be more comfortable with cryptocurrency as a commodity than as a currency.
Although this is only the beginning, the discussion has established the certainty that cryptocurrency can be regulated as a commodity. Tata Consultancy Services [TCS] in India announced on July 8 the launch of its Quartz Smart solution to help financial institutions offer cryptocurrency trading. This could lead the committee to take a second look at the crypto bill before approval.
