India Mulls Legalizing Cryptos as Indian Whatsapp Users Await Stablecoin
India is finally looking to accept crypto use as legit in its second largest population market although with some strict rules. That’s according to the general consensus among the second interdisciplinary committee that met recently in the country. Members agreed that “cryptocurrency cannot be dismissed as completely illegal”, says an official who attended the meeting and spoke to The New Indian Express.
After the first interdisciplinary committee set up in March 2017 concluded its work, it recommended a total ban on cryptocurrency in India towards the end of the year. The Reserve Bank of India (RBI) immediately declared cryptocurrencies illegal and commercial banks acted by disrupting crypto-related transactions thus causing some cryptocurrency exchanges in the country to cut down or shut down their operations. Yet, India showed interest in the underlying blockchain technology.
It was not clear at the time how India planned to separate blockchain from crypto or place an outright ban on cryptocurrency use. As argued last month, it would seem extremely odd for India to go in either direction. Aside the brain drain consequences and losing the liberty to create job opportunities for citizens, the various favorable developments linked to cryptocurrencies lately in the Asian region may see India being left behind in the region.
From China to Japan, cryptocurrencies like Bitcoin recorded victories regarding their use in Asia’s top economies lately. A Chinese court ruled that Bitcoin and others are protected by law as legal property and Chinese citizens can own or transfer them; a South Korean court ruled in favor of a local crypto Exchange, Coinis, in a legal battle with one of the country’s largest commercial banks, Nonghyup; and Hong Kong’s financial body announced a regulatory framework for crypto-related platform operators. Even at that, India ought to realize that despite regulators’ ban on certain crypto-related activities in places like China where there are more crypto-related activities, the demand for and use of cryptos among Chinese investors did not subside.
The second interdisciplinary committee seems to have seen reasons why the country needs to rethink its stance. Though no timeframe is available for the conclusion of the committee’s work, they hinted that deliberations are on despite having met twice on the issue and their final report should be submitted to the finance ministry by February.
This hint at a positive outcome for cryptocurrencies comes just after reports say Facebook is working on a cryptocurrency that will enable Indian users of its messaging app, WhatsApp, to transfer money to one another.
The proposed Facebook cryptocurrency – which is likely to be a stablecoin – is first aimed at India’s remittances market. There are more than 200 million Whatsapp users in India. The country also leads the world in remittances — people sent $69 billion home to India in 2017 according to the World Bank.