In an unexpected turn of events, an Indian minister recently clarified that Bitcoin is not banned in the country. Speaking at the Rajya Sabha, the upper house of the Parliament, Minister of State to Ministry of Finance Anurag Singh Thakur said that Bitcoin is not illegal.
Bitcoin is still operating in the shadows
Thakur said that a government-appointed interministerial committee is looking into the digital currency market in India. He also emphasized that the Ministry of Finance and the Reserve Bank of India have launched several circulars regarding the use of digital currencies in India. Only the committee will have the authority to make a statement about the final status of digital currencies.
Note that the RBI has already adopted a hawkish stance on Bitcoin and it banned all banking entities from engaging with companies providing crypto services in April 2018. Since then, two crypto exchanges- ZebPay and Koinex have closed shop due to consistent financial troubles.
“Presently, there is no separate law for dealing with issues relating to cryptocurrencies. Hence, all concerned Departments and law enforcement agencies, such as RBI, Enforcement Directorate and Income Tax authorities, etc. take action as per the relevant existing laws.”
Will the Supreme Court be favorable?
After the RBI’s blanket ban on banking services to cryptocurrency traders, Indian crypto companies moved to the Supreme Court. They argued that the central bank is misusing its powers to dry up resources for digital currency operators. After the case was initially filed in July 2018, it has seen several delays because of which times were very tough for the operators.
Koinex, the largest crypto exchange in India, which shut down a few weeks ago, noted that its decision was inspired because of constant issues with finances. The company’s employees had issues in getting paid, and they were frequently called by banking officials, asking them how their salary credits each month.
The last hearing for the case was held on April 2019, but the Court decided that it would hear the final arguments after the summer holidays. The court will hear the arguments again on July 23, 2019, and the inter-ministerial committee is expected to submit its draft report before the court on this day.
The details of the report are still unclear, but there were rumors about the committee mulling a 10-year imprisonment sentence alongside a fine for trading in digital currencies. Previous reports highlighted the imposition of GST on digital coins. However, the final confirmation could only be found once the committee tables its report to the apex court.