India’s government is reportedly mulling the launch of crypto tokens of its own for financial transactions in the country despite…
India’s government is reportedly mulling the launch of crypto tokens of its own for financial transactions in the country despite an ongoing banking ban on decentralized cryptocurrencies.
An inter-governmental committee tasked to study and propose a regulatory roadmap for the cryptocurrency sector is also examining the usability of crypto tokens in the public sector, domestic publication DNA India reports citing sources.
The committee is reportedly eyeing the use of the custom blockchain-based crypto as a tokenized representation of money rather a direct substitute to currency on its own, with applications such as metro card tokens.
The report cites a senior official from the country’s finance ministry as stating:
The committee is examining if crypto tokens can be used to replace smart cards such as metro cards in the public sector to start with. Similarly, in the private sector, it can be used in loyalty programs such as air miles where its use is limited to buying the next ticket and can’t be converted into money.
The Inter-Ministerial Committee (IMC), first established by the Ministry of Finance in early 2017, includes India’s taxation authority, India’s Department of Economic Affairs (DoEA) and a number of other ministries alongside representatives from India’s central bank and the State Bank of India, the country’s largest bank.
The committee was specifically tasked to examine the status of cryptocurrencies both domestically and internationally, study regulatory and legal frameworks adopted by other countries as well as examine measures to curb money laundering fears before ultimately proposing a regulatory framework for the sector in the nation.
While the committee deliberated over the proposal with significant delays, India’s central bank issued a circular in April 2018 that mandated all regulated financial institutions including banks to prohibit services to all cryptocurrency companies.
"This is a difficult subject, involving technology which is changing every now and then. That's why it is taking some time," DoEA secretary and head of the IMC Subash Chandra Garg told DNA, despite a televised June interview wherein the official stressed the committee was “in a position to wrap this up [crypto regulations] in the first fortnight of July.”
Mumbai metro image from Shutterstock.