What would you call an organization that is sitting atop a game-changing regulatory framework for more than a year but couldn’t submit a single proposal nevertheless? Incompetent, perhaps.
It is precisely what the Interministerial Committee (IMC) has become: an incompetent group of administrators and ministers that cannot decide what it wants to do with new technologies.
Established by the Finance Minister Arun Jaitley in December 2017, the IMC was first told to submit its proposal in July 2018. But it kept delaying the matter, citing “lots of issues that need understanding” and “lots of studying” that needs to be done.
Before everything, it is vital to understand that IMC had assumed that bitcoin shared characteristics of classical Ponzi schemes even before beginning their so-called studying. The committee’s head, Subhash Chandra Garg, who is also the economic affairs secretary, had tweeted:
“Cryptocurrencies like bitcoins are neither currency nor coin. Not legal tender in India at all. Trade in these currencies has assumed the character of classical Ponzi schemes. Limited supply and uninformed demand make every new investor assume a higher risk. No underlying real value.
Such blatant statements from Garg, which Jaitley later repeated in the parliament, allowed the Indian media to project bitcoin as a scam. The misinformation rippled across the TV sets and newspapers addressing billions of people. (In my personal experience, a passenger in Delhi Metro called me a scammer (and yes, he was loud enough) merely because I was speaking to a colleague on the phone about a topic related to bitcoin trading.)
The result of poor media coverage was evident in the Reserve Bank of India’s April circular. The document ordered banks to stop offering services to the cryptocurrency exchanges. Under the garb of regulating an industry, the Garg-led IMC destroyed the entire line of communication that could have led to a gradual understanding of cryptocurrencies. And yet, they were “studying” the technology.
That all happened when the rest of the world took aggressive steps in drafting their cryptocurrency policies. Even without a full-fledged law, the citizens in the United States could trade bitcoins and launch blockchain startups under a limited regulatory watch. Countries in Europe developed their stance on cryptocurrencies. For instance, Finland classified them as financial service, Bulgaria brought them under its existing tax laws, and Germany legalized them by imposing taxes based on the kind of cryptocurrency activities.
In Indian, the crypto community is still fighting the RBI’s ban in the Supreme Court, India’s apex judiciary body. They want a clear and evident framework, so no more Zebpays have to leave the country, and no more Harish BVs face arrests for installing a harmless bitcoin kiosk.
But even the legal proceedings are facing delays of its own.
March 29, 2019, marked the fifth time the Supreme Court adjourned the crypto vs. RBI hearing. This time also, a government counsel requested for the delay because they didn’t have a draft ready. And there is no guarantee that in the next hearing, scheduled for July this year, would see positive movements towards a reasonable crypto regulation. Here is a government body that couldn’t even respect its judiciary’s order to serve a crypto draft by March 29.
From the look of it, the Indian crypto sector has more to suffer at the hands of an incompetent bureaucracy and governance. Let’s pray it does not go into a s***hole.