India retains cautious Cryptocurrency stance
India retains cautious cryptocurrency stance
A raft of recent news reports and blogs posts, suggest that those involved in the cryptocurrency markets are becoming a little impatient with the Indian Government and the Reserve Bank of India’s (RBI) caution relating to that specific financial sub-sector. The reports contain some conflicting views from different members of the two panels that are working to research cryptocurrencies and put a regulatory framework in place. However, despite a lack of real progress it appears the overall, official tone towards the crypto market is less negative than it previously was.
One of the Indian government’s panels currently researching the cryptocurrency markets is set to submit a report on its findings. That keenly awaited report has been delayed from July 2018 and right now, no time line is in place for it to be finalised and published. This detail is the cause of some of that unrest.
With that report being delayed, it’s no surprise that any details on possible virtual currency regulation in India is also taking time to be finalised. Without the approved findings of the official report, it simply doesn’t make any sense for a regulatory framework to be put in place.
Among the most likely reasons behind the slow progress of any official view and policy on cryptocurrencies across India, is the lack of a global steer. Also, and perhaps more importantly, is a lack of detailed knowledge and information on exactly what impact cryptocurrencies can have on the economy, particularly over the medium-to-long-term.
Some support for virtual currencies
While uncertainty over exactly how India will regulate and permit cryptocurrencies to be traded and taxed remains, it does appear that the Indian government is more positive on them becoming a permanent part of its financial landscape, than it was.
The Financial Stability Board (FSB), which India is a part of, has said that virtual currencies are not a threat.
“The FSB has undertaken a review of the financial stability risks posed by the rapid growth of crypto-assets. Its initial assessment is that crypto-assets do not pose risks to global financial stability currently,” the RBI report quoted the FSB as stating.
That’s a positive note and relevant to the discussions and research that are ongoing.
Getting it right
Despite that glimmer of support for crypto-currencies, global governments, central banks and other relevant bodies continue to move slowly with regards to implementing official regulation and plans to regulate Bitcoin, et al. But really, is it any wonder?
After surging in value during 2017, many virtual currencies then lost much of those gains during 2018. And now…? Well, the future for those currencies is very much unknown, particularly coming against a backdrop of so much broad-based uncertainty elsewhere.
Of course, the blockchain system that underpins cryptocurrencies is something that the Indian government and RBI are interested in, as are other countries and industries. But, having regulation and utilising one, is likely impossible without also having the other.
This is without doubt, another major reason why the panels formed to investigate cryptocurrencies are taking their time to collate all the details and submit a detailed and useful report. If blockchain is to become a part of India’s government, business industries and the economy, then it’s essential that any risks relating to supporting a regulated cryptocurrency network is clear, robust and performs the task it was created for.
India as a nation is one that welcomes change and new ways of doing things – provided it’s beneficial for the economy and its population. Even though it’s likely that virtual currencies and blockchain fall under that category, both the government and the RBI are right to be cautious over any policy and regulation that’s created, so they can be certain it’s right for India’s economy and its huge population, with its growing appetite for all things digital.
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India’s appetite to be at the forefront of new technology is continuing to develop. However, even though some countries have begun a light touch regulatory oversight on cryptocurrencies, that doesn’t mean the government or RBI will rush into something that has the potential to impact India’s economy and financial landscape over the longer-term.
Indeed, a cautious outlook doesn’t mean digital currencies have no place, or an insignificant one for India’s economy. In fact, it’s more likely to suggest the opposite and that as a country, the government and central bank want to be sure they get their policy implementation on it, just right.
At Red Ribbon, we have the same attitude to new and developing opportunities. We’re willing to take some risk on new industries and investment opportunities, but only when we know exactly what those new industries have done and have the potential to achieve. With Eco Hotels and Modulex, we’ve worked hard to ensure we understand everything those businesses stand for and what they’re capable of, not only from an investment perspective, but on a global sustainability aspect, too.
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