India’s government will soon put forward a bill on cryptocurrencies, the country’s minister of state for finance and corporate affairs Anurag Thakur said. It is in the process of finalising the crypto bill and it will be ready for Union Cabinet’s review soon.
In 2018, the country’s central bank, the Reserve Bank of India (RBI), had banned banks from processing transactions relating to cryptocurrency. However, in March last year, the Supreme Court had lifted the ban.
Speaking in the upper house of the Indian Parliament, Thakur said existing laws in India are “inadequate” to regulate cryptocurrencies. Thus, an inter-ministerial committee (IMC) had been studying on the subject, and that committee submitted its report.
The government would take a decision on the recommendations of the IMC and the legislative proposal.
In 2019, the IMC proposed a draft bill banning trading activities of all “private cryptocurrencies”, which would likely include all crypto assets apart from those issued by a central bank. Thus “private cryptocurrencies” would likely include all major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), among others.
The final text of the crypto bill, as well as the definition of private cryptocurrencies, is still unknown. It will likely to be public within the current Parliament session, which concludes on April 8.
US Federal Reserve Branch Bullish About DeFi
On another note, a paper regarding Ethereum and decentralized finance (DeFi) was recently published to the website of the St. Louis Federal Reserve, one of the twelve reserve banks of the United States’ central bank.
The report, titled “Decentralized Finance: On Blockchain- and Smart Contract-Based Financial Markets”, is bullish about DeFi’s potential, noting that DeFi has the benefits of accessibility, composability, efficiency, and transparency.
The report underlines that DeFi instruments provide modern economic institutions with plenty of opportunities. However, it also states that smart contracts, dependencies, and operational security are key risks to address.
The paper ends on a positive note: “I conclude that DeFi still is a niche market with certain risks but that it also has interesting properties in terms of efficiency, transparency, accessibility, and composability. As such, DeFi may potentially contribute to a more robust and transparent financial infrastructure.”