India’s Ministry of Finance announced via its Twitter account on May 20, 2017, that it is inviting the public to offer comments and/or suggestions on the future of virtual currency regulatory framework in the country.
The Ministry of Finance is accepting input until May 31 for the following questions, which are posted on the citizen engagement platform MyGov:
a) Whether Virtual Currencies (VCs) should be banned, regulated or observed?
b) In case VCs are suggested to be regulated:
i) What measures should be taken to ensure consumer protection?
ii) What measures should be taken to promote orderly development of VCs?
iii) Which appropriate institution(s) should monitor/ regulate the VCs?
c) In case VCs are not suggested to be regulated:
i) What should be the effective self-regulatory mechanism?
ii) What measures should be adopted to ensure consumer protection in this scenario?
The Indian Government has cautioned consumers and businesses since December 2013 “about the potential financial, operational, legal, customer protection and security-related risks” of virtual currencies. The most recent warning was publicized in February 2017. However, as the country lingers in the midst of demonetization, it appears citizens are looking to virtual currencies as an alternative investment to the dwindling Rupee. As a result, Indian exchanges are experiencing a surge in activity and investments. Chitral Patel, growth officer of Indian exchange Zebpay, tells ETHNews:
“We're adding 2,500 users daily and our total downloads on Android has just crossed the 500,000 downloads mark.”
This growth has occurred despite the Minister of State for Finance, Arjun Ram Meghwal, hot-handing virtual currencies as “not authorized” in March. One month later, the Indian government publicized the establishment of a Virtual Currency Committee that will examine existing framework and conduct a comprehensive review of the technology. In April, the committee announced it would submit a report of its findings within three months.
Nevertheless, the Ministry of Finance’s request for public input could be the first step in not only estimating demand for virtual currencies, but also reaching a harmonious relationship with the technology in India.