India is going through a Bitcoin revolution, as the interest in the cryptocurrency continues to increase. At the same time, the Bitcoin ecosystem is currently at the crossroads due to the government’s interest in regulating the digital currency.
Following the creation of an inter-ministerial committee to evaluate cryptocurrencies and potential regulatory steps, there are speculations that Securities and Exchange Board of India might soon be overseeing digital currency related regulations. However, given the fact that SEBI’s expertise lies in regulating the conventional markets and financial assets, a move to include cryptocurrencies under its purview might burden not only the organization but also hamper the industry’s growth.
According to Sandeep Goenka, the co-founder of Zebpay — one of the “Big Four” Indian Bitcoin platforms, the government as well as the cryptocurrency industry can benefit from the creation of a self-regulatory body for digital currencies. He was quoted by a leading Indian daily saying,
“In the beginning, because there are so many changes happening to the industry, and it is difficult for the government to follow, they can simply allow us to form a self-regulatory organization (STO) on the lines of the Mutual Fund Association of India, Internet & Mobile Association of India, or the Payment Council of India.”
He further states that the SEBI by itself started as a self-regulatory organization, with its own regulatory structure until it was made an official regulatory body. Goenka also states that the government should not consider banning digital currencies, especially Bitcoin as it is increasingly being used as a store of value.
The Indian Bitcoin industry has so far been self-regulated, with the platforms having their own set of KYC verification process. For a country like India, which represents a huge market for cryptocurrencies and blockchain technology, strict regulations might hamper innovation.
It is still unclear as to how the cryptocurrency regulations in the country will pan out. Until something concrete is announced, the industry will continue to be shrouded in uncertainty.
Ref: The Hindu | Image: NewsBTC