Anurag Thakur, Indian Minister of State for Finance and Corporate Affairs, said in an interview with Times Now yesterday that the government plans to protect investors against the volatility of the cryptocurrency market.
Precisely how India’s lawmakers plan to do that, however, remains unclear.
“The fluctuations in the price of cryptocurrencies are so high—unlike that of fiat currencies—and that has an impact on the investors,” the minister said. “So we need to keep investor protection in mind while framing a law.”
India’s much-anticipated crypto bill was previously scheduled for parliamentary introduction by last week. But the plans changed due to local elections, the minister said.
As the government continues to drop hints as to what the bill might contain, the Indian crypto industry closely examines each and every statement coming out of ministers.
This one is no different.
Indian crypto industry representatives told Decrypt that the government may be considering a form of market “circuit breakers,” limiting the number of transactions on crypto exchanges under certain conditions. But most importantly, it’s an even stronger sign that a regulatory framework—instead of a ban as previously feared—is in the making, some said. Others, however, remain sceptical and worry that an outright ban may still be in the works.
Protection from volatility?
The minister’s words didn’t come as a surprise to many in the industry as India’s government has long considered ways of protecting crypto investors.
"In our past conversations with lawmakers,” Sumit Gupta, CEO, and co-founder of crypto exchange CoinDCX told Decrypt, “one major concern they highlighted was investor protection in crypto.”
The minister’s words sounded like a form of “circuit breakers,” said Jagdish Pandya, chairman of Block On Capital, a blockchain advisory company. “But let’s wait and see,” he added. In a similarly cautious interpretation, Gaurav Dahake, CEO of the crypto exchange Bitbns, told Decrypt that “the minister might be indicating certain limits to transactions.”
“But it’s now pretty clear,” Dahake said more confidently. “The government is not planning to ban crypto, but regulate it.”
But as with every—admittedly vague—ministerial statement on India’s crypto future, there’s always a way to interpret it as potentially hinting at a ban.
The minister talked about protecting investors from crypto’s volatility, Zakhil Suresh, founder of crypto fantasy trading app SuperStox, told Decrypt. “That’s different from protecting crypto investors,” he said.
“What if that ‘protection’ is actually in the form of… keeping people away from crypto?”
Change of plans
The draft bill was scheduled to be introduced sometime by April 8, the last day of the parliamentary session in India, as Decrypt last month reported.
But that didn’t happen, the minister Thakur explained, as the parliament adjourned on March 25 due to the elections taking place in five states.
If it had been introduced in the last session, the draft bill would still have a long way before becoming law. Both chambers of the parliament—lower and upper chambers, similar to the US Congress—would have to debate it. If approved by the parliament, the president would then have a final say on it.
While that’s a lengthy legislative process, the draft bill’s introduction to the lower chamber—the first step—would have finally exposed its details to the public. Instead, crypto entrepreneurs in the country are left only to speculate for the moment.
Indian crypto suspense
“The minister was specifically asked whether the government considered banning crypto or not,” Suresh, told Decrypt, “but he dodged the question.”
“Why build so much suspense around this? Just say what you’re planning to do—just as the government does with most other bills.”
The draft bill is likely to be introduced in the parliament’s monsoon session (summertime), explained Sidharth Sogani, who heads the industry pressure group, the Association for Blockchain, Crypto (ABC).
“An ordinance is also in the cards, but it’s much less likely,” he said, referring to another way a law can be introduced directly by the Indian president, similar to how a US president would issue an executive order.
India’s crypto bill anxiety is understandable: after all, a 2019 draft bill proposed harsh measures, such as one to 10 years of imprisonment in cases of “direct or indirect use of cryptocurrencies.”
Editor's note: A previous version of this article incorrectly stated that India's CoinDCX exchange listed only 14 cryptocurrencies. It lists over 500. CoinDCX's mobile app lists 14.