Claim: India looking to legalize crypto
Source: Pomp’s “this week in crypto” tweet which has drawn 1k RTs at the time of this writing.
While the phrase “looking to” is vague enough to include any possible explorations, one obvious way to interpret this is that overall government sentiment is positive and/or they’re moving faster than before on this topic. Neither is accurate as several India-based responses immediately point out:
Let’s dig in ourselves. I’m assuming Pomp’s source for this tweet was a 12/26 Coindesk article which only references this Indian publication. That piece has a single positive comment from an anonymous official :
We have already had two meetings. There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalised with strong riders. Deliberations are on. We will have more clarity soon. We have also taken inputs from cryptocurrency exchanges and experts and will be examining legal issues with the law ministry. It’s a complicated issue. Once all aspects are decided, then we will have more clarity.
The New Indian Express journalist interprets the comment in this manner: “Holding cryptocurrency like Bitcoin is banned in India, but that could change, as the second interdisciplinary committee is in favour of legalising it, with harsh riders.”
I can’t lend credibility to that interpretation when the first part of the sentence is already false. Holding cryptocurrency is not and was never banned in India. It’s just not recognized as legal tender (and neither is gold…). Here are the only definitive comments the Indian government has made on this topic:
The government does not recognise cryptocurrencies as 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 payments system - Arjun Jaitley, Finance Minister (source)
There’s a lot of false information on whether crypto is banned in India (it’s not!) and its implications. This tweet and article does a good job of articulating what’s true and blatantly false. I’d recommend reading that if you’re unfamiliar about this topic.
So what’s actually happening now?
The IMC committee is going to have another meeting and draft a report to the Finance Ministry early next year with recommendations on “digital currencies and the use of the blockchain technology in the financial systems in India”. (source)
What is the IMC committee?
It’s led by Subhash Chandra Garg, the Department of Economic Affairs secretary. Members include Ajay Tyagi, chairman of India’s market regulator, the Securities and Exchange Board of India, and BP Kanungo, deputy governor of the Reserve Bank of India, and representatives from the ministry of Electronics and Information Technology). Source
What is the next step / timeline?
They plan to submit a report to the Finance Ministry by February next month. It’s important to note that this is just a soft goal. Progress on regulating crypto in India has been historically delayed multiple times.
Flagged for misleading.
The more I dig into this, the more it feels like the “New Indian Express” journalist spun a somewhat positive quote into a misleading headline (“Bitcoin on highway to being legit” - really?) that ultimately spiraled into tweets like Pomp’s. I personally don’t think any meaningful progress has been made until we actually see this oft-mentioned “draft bill” and hear the reactions to it from those in decision-making power. Meetings don’t mean anything until we either have public records of the meeting or have on-the-record comments from officials.