Anish Krishnan, interning with us at TRA for January – February 2018 and Nehaa Chaudhari, Lead – Policy have put together a timeline on key developments on #cryptocurrency law and policy in India.
February
10th: Sebi chief states Rules on cryptocurrencies should be out soon. Tyagi, who is part of the committee formed by the government to examine the pros and cons of virtual currencies (VCs), including launching an own cryptocurrency, said that a policy in this regard should come out first and then only the role of Sebi can be outlined – https://timesofindia.indiatimes.com/business/india-business/rules-on-cryptocurrencies-should-be-out-soon-sebi-chief/articleshow/62862964.cms
9th: India’s Income Tax Department recently announced that it has issued notices to 100,000 cryptocurrency investors. The announcement came in light of government surveys into the operations of multiple leading Indian exchanges that have revealed widespread tax evasion on the part of India’s cryptocurrency traders – https://www.ft.com/content/7e41a850-0c92-11e8-8eb7-42f857ea9f09
5th: India planning to outlaw digital currencies from system. Subhash Chandra Garg, economics affairs secretary told CNBC the government is setting up a panel to analyse the cryptocurrency situation and aims to submit a report in the current fiscal year and said: “The government will take steps to make it illegal as a payment system. As well as having a regulator in place.” – https://www.express.co.uk/finance/city/914799/bitcoin-india-cryptocurrency-finance-minister-Arun-Jaitley-Ponzi-scheme
1st: Union Budget 2018 – Cryptocurrency is not legal tender in India but the govt will explore blockchain to usher in the digital economy, says Arun Jaitley. The government will take measures to eliminate use of crypto-assets in financing illegitimate activities or as part of the payment system – http://www.livemint.com/Politics/xmBDOdP2H2hbXH7eV1VTqL/Budget-2018-Crypto-currencies-illegal-will-eliminate-their.html
January
29th: Cryptocurrency investors in a fix as banks stop taking deposits from wallets. Investors said that they were unable to either trade on some of the bitcoin exchanges or withdraw the money they had invested into their bank accounts – http://www.moneycontrol.com/news/business/cryptocurrency/cryptocurrency-investors-in-a-fix-as-banks-stop-taking-deposits-from-wallets-2493113.html
23rd: RoC Forbids Cryptocurrency Exchanges from Registering Under Companies Act, 2013. As per the report, the Ministry of Corporate Affairs wing has asked for an undertaking from software development or information technology companies that they will not deal with cryptocurrencies – https://inc42.com/buzz/cryptocurrency-exchanges-bitcoin/
3rd: Bitcoin not legal tender, Finance Ministry. “VCs are not currencies. These are also being described as ‘coins’. There is however no physical attribute to these coins. Therefore, VCs are neither currencies nor coins,” the ministry said in a press statement – http://www.livemint.com/Money/jKmPIwhqwLQ1SBvEtDSpYO/Bitcoin-is-not-legal-tender-in-India-finance-ministry.html
2017
December
28th: Exchanges report issues with banks and payment gateways. Updates by Zebpay, UnoCoin and ethx.in – https://inc42.com/buzz/indian-cryptocurrency-exchanges-bitcoin/
23rd: IT Dept. sends notices to HNI’s, questions source of investments. The income tax department has specifically asked for details of investment and sales of bitcoins and other cryptocurrencies in India and abroad between 1 November 2016 and 31 December 2016 – http://www.livemint.com/Money/CaqKo2AmWOW5rRgUIArl1J/Bitcoin-Income-tax-dept-sends-notices-to-HNIs-wants-to-kno.html
21st: RBI issues notifications to 3 major Bitcoin funds, survey reports said this was done to collect information about transactions and check whether there was a risk of tax evasion – http://www.livemint.com/Money/uQIHZ7521LBgHClnuP66YM/Bitcoin-regulations-in-India.html
20th: SEBI says Bitcoins cannot be ignored, Chairman Ajay Tyagi said the virtual currency has not posed any systemic threat and a government panel is looking into it – http://www.livemint.com/Money/SKuyUSpR9jjKnEkkKjoukO/Sebi-says-bitcoin-cannot-be-ignored.html
14th: Income Tax department turns heat on bitcoin exchanges across country, checks for evasion. The surveys on nine virtual currency exchanges in Bengaluru, Hyderabad, Mumbai, Delhi and Kochi are aimed at ascertaining the source of funds and tax evasion, if any, following recent reports of large-scale encashing of cryptocurrencies. https://economictimes.indiatimes.com/industry/banking/finance/banking/i-t-dept-conducts-surveys-at-bitcoin-exchanges-country-wide/articleshow/62049817.cms
November
Ban on cryptocurrency dealers reportedly recommended by the government appointed high level panel. Adoption of bitcoin can pose various problems for the government as it will tend to lose its control over the financial system – https://lnkd.in/fFwy59y
RBI official reportedly says that bitcoins will not be used for settlements or for payments, but that there will be no end to “technologies underlying cryptocurrencies.” – https://lnkd.in/fNm9v48
September
Govt. considers introducing Lakshmi, its own cryptocurrency. Lakshmi to be regulated by the RBI. Running a ledger-like blockchain cryptocurrency is required for settlement and the RBI and government officials have said that they are not comfortable with Bitcoin – https://lnkd.in/fCdxkFw
An RBI group was reportedly examining cryptocurrencies as legal tender; the RBI was uncomfortable with non-fiat cryptocurrencies – https://lnkd.in/f-rW-zJ
August
Committee submits report but the contents have not been made public. Crypto-currency startups like Zebpay are pitching for a model where the industry association Digital Assets and Blockchain Foundation of India (DABFI) is allowed to function as a self-regulatory body – http://www.thehindubusinessline.com/economy/policy/panel-on-cryptocurrency-submits-report-to-jaitley/article9805978.ece
April
The Government sets up a 9 member committee to study cryptocurrencies. Chaired by Dinesh Sharma, Special Secretary in the Economic Affairs Department of the Finance Ministry including representatives from department of economic affairs, department of financial services, Reserve Bank of India, NITI Aayog and State Bank of India – https://lnkd.in/fKm7BUC
March
Use of virtual currencies not authorized by the RBI, says govt. Users may find themselves violating anti-money laundering and financial terrorism laws. “No regulatory approval, registration or authorisation is stated to have been obtained by the entities concerned” – Arjun Ram Meghwal, Minister of State for Finance- https://lnkd.in/fPdKrue
February
1st: Press Release: RBI cautions users of Virtual Currencies. The Reserve Bank of India cautions users, holders and traders of Virtual Currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to – https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=3943
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