The Indian regulators continue to be baffled by cryptocurrencies! In a new report published by Quartz, sources have revealed that the Indian government still needs time to understand cryptocurrencies and any official regulation is expected only by end of 2018. Earlier this year, there were talks about the cryptocurrency regulations to be in place by September 2018, but clearly there is still a lot of confusion that surrounds this nascent technology. While some reports said that the government plans to regulate cryptocurrencies as commodities, other reports have said that India wants to launch its own crypto tokens for financial transactions.
The Indian government wants to adopt blockchain, but without cryptocurrencies, and is looking at ways to do this from a regulatory standpoint. However, if you want to use a public blockchain for financial transactions, you will need a cryptocurrency token for value transfer. The confusion clearly shows that the regulators still need to have a better understanding of cryptocurrencies, and the whole space at large.
While the Indian government has had a dialogue with official stakeholders such as the Blockchain and Cryptocurrency Committee, they need to continuously engage with them to get a better grip on this technology. They can also look at regulations adopted by countries such as Japan, Singapore and Malta to set a regulatory template. We sincerely hope that the government comes up with a well-thought out roadmap for cryptocurrency regulation instead of a knee-jerk reaction like the RBI ban.