As the global investor community starts to become increasingly aware of what crypto has to offer, it appears as though this burgeoning asset class is becoming more and more accepted. This is probably best highlighted by the fact that after experiencing bearish conditions all through 2018 (with Bitcoin even stooping at one point to around the $3K mark), the digital currency market as a whole was able to swiftly regain its former momentum and […]
— Crypto Regulation (@cryptoregulator) August 12, 2019
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The central government initially wanted to regulate the bitcoin sector but changed its stand due to objection from the Reserve Bank of India (RBI), reports Business Standard. The Indian daily claimed that Economic Affairs Secretary Subhash Chandra Garg, who was heading the interministerial committee to study cryptocurrencies, favored regulating them. Garg, in the first committee meeting held on November 27, 2017, admitted that enforcing a ban on the cryptocurrency industry was difficult. RBI did not agree with the proposals made by the Garg committee. In the next meeting held on February 22, 2018, the Indian central bank proposed a complete ban on bitcoin and other cryptocurrencies. That soon followed the release of a circular that ordered all the Indian banks to cut ties with cryptocurrency exchanges. Business Standard noted that the RBI reached to its anti-bitcoin conclusion soon after Arun Jaitley, the Finance Minister of India at that time, said in the parliament that their government does not recognize bitcoin as legal tender. Jaitley also said that they would take all the measures to eliminate its use. However, Garg opposed those views. The bureaucrat reminded the regulators that G20 at that time was also looking into the matter. He also cited countries like South Korea that earlier attempted to ban bitcoin but later had to reverse their calls knowing that enforcing a ban on bitcoin was difficult. The minutes of the meeting read: “Secretary (EA) said that the option of banning can be looked afresh and asked RBI and CBDT to prepare draft law which might be needed to be prepared in case banning option is accepted. Using cryptocurrencies in payment systems may be banned but not in its entirety considering the nature of technology.” The minutes explained that the committee prepared two drafts: one that favors a ban, and the other that support regulations. The ‘bitcoin ban’ draft appeared before the public for the first time on Monday. The draft that supported the regulating of bitcoin and other cryptocurrencies remains inaccessible.