There may still be hope for cryptocurrencies in India. According to a recently released report titled “Legal Framework: Gambling and Sports Betting Including Cricket India”, cryptocurrencies could be used to make payments after all.
The report was constituted to provide a mechanism that will tackle illegal gambling in India. After the government imposed a ban on gambling, gamblers opted for underground gambling. In the last Indian Premier League cricket matches, citizens gambled millions of dollars. Reports reveal that many popular and high-ranking officials in the sport also participate in illegal gambling by using black money that cannot trace back to them.
Illegal gambling on the rise in India
Due to increased illegal gambling activities and use of black money, the Indian Supreme Court was forced to suggest legalization of the market altogether. Authorities tasked the Lodha Committee and the Board of Control Cricket India with the responsibility to find a lasting solution to the problem.
The committee tinkered on including cryptocurrencis in gambling to solve problem – it may turn out to be a one stone killing two birds by saving the two industries. The Indian government’s hard stance on cryptocurrency hit a high earlier in April when the Reserved Bank of India (RBI) banned all financial institutions in the country from making crypto transactions. The ban, which took effect on July 5, crippled operations in many crypto exchanges leading to monetary loses for investors. Consequently, investors filed several suits against the RBI to have the ban lifted. The case was pushed to the Supreme Court where the RBI ban has been challenged. The final hearing is scheduled for September 11, 2018
If the committee’s recommendations are applied, cryptocurrencies will get the legal backing to resume operations. The recommendations may sway the government to not only sweep away the ban on gambling, but also lift the one on cryptocurrencies. In the report, the committee suggested that gambling should be made cashless to enable use of electronic means of payments such as credit cards, net banking, debit cards, virtual currencies and so forth.
While speaking to Quartz, Nischal Shetty, founder and CEO of Virtual currency exchange WazirX said:
“It is the first time that a body appointed by the government has given recognition to virtual currencies on their value and validity in conducting transactions”
He added that this is a very positive sign from the authorities considering that the committee deliberated on the matter at length.
The cryptocurrency issue plunged into confusion after the Supreme Court upheld the ban. According to reports, an unnamed government official told a reporter that the government is actually inclined to lift the ban. He stated that the government is planning to classify cryptocurrencies as commodities rather than currencies. He intimated that the government, through RBI, banned crypto trade in the country due to lack of regulations and illegal activities such as money laundering, funding terrorist groups, cryptojacking and hacking. The stated:
“Trade is not a criminal offense. What has to be in place is a mechanism to be sure that the money used is not illegal money and to track its source is the most important thing.”
By treating cryptocurrencies as commodities, crypto traders will be allowed to resume their operations. It is however not clear when the government will make and implement the regulation.