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India Recognizes Cryptocurrencies as Valid Form of Electron...
Bitcoin, Cryptocurrency, Finance

India Recognizes Cryptocurrencies as Valid Form of Electronic Payment

(Last Updated On: August 1, 2018)

A delightful news came to Cryptomarket and stirred a wave of immense relief in India. Recognition of cryptocurrencies as  a valid form of electronic payment, like credit and debit cards by the Law commission of India provided a new lease of life to Cryptomarket.

The report titled ‘‘Legal Framework : Gambling and Sports Betting Including  Cricket in India” is a step to explore the use of digital payment mechanisms including cryptocurrencies. The report talks about the serious aspects associated with gambling and the ban implemented over it has made it a practice undercover leading to illegal activities grow.

The report can be considered  a result of police probe into betting allegations during the Indian Premier League (IPL) cricket matches which  brought the celebrity faces and politicians in light for using ‘black money’ for setting their bets ,overruling government’s betting circles.

The widespread misconception regarding government’s take made Supreme Court of India to suggest Law Commission to legalize the sports betting market and appoint Lodha Committee to analyze the said suggestion . A letter in this regard was written to Union Minister Ravi Shankar Prasad by Supreme Court in 2017.

HIGHLIGHTS OF THE REPORT

In its report Law Commission highlighted :

Gambling transactions should be made cashless, making use of electronic means of payment such as credit cards, debit cards, net-banking, Virtual Currencies (VC –also known as Cryptocurrency), etc.”

It further stated :

“The issue of Online Gambling has further been worsened by the rise in popularity and ease of availability of VC, a  form of electronic money. Having taken the form of a parallel economy, gambling with VC, pushes even the Online Gambling market underground, and very often, out of the reach of the law enforcement authorities.”

Lodha committee ,appointed to explore the suggestion given by Supreme Court said that under the legal regulation there is a fine boundary between recreational betting and match-fixing. Match fixing is a legal offense and on the other hand recreation betting is a means of generating tax. It is noteworthy that the law commission considered cryptocurrencies as a method of digital payment like debit cards,credit cards and net banking. Regarding this , the commission stated:

“Gambling transactions should be made cashless, making use of electronic means of payment such as credit cards, debit cards, net-banking, Virtual Currencies (VC –also known as Cryptocurrency), etc.”

Recent case of more than 500 people arrested in Hongkong  for gambling using cryptocurrencies during Football world cup was discussed by the commission. The Philippine Gaming Regulator,(PAGCOR) which is dealing with same issue of losing much to illegal and unregulated gambling was well explored .

The commission advised :

“The nature of stakes (in gambling) should be restricted to money with a linkage to PAN card and Aadhaar card, and the betting amount should be prescribed by law, having an upper limit on the amount one can legally stake in a gamble, which may be on the basis of the deposit, winnings or losses. Similar restrictions should also be prescribed for the purpose of the amount one would be allowed to stake while using electronic money facilities of the likes of credit cards, debit cards, net-banking, VCs, etc.”

With the strict stance taken by the Reserve Bank of India regarding cryptocurrencies ,there have been growing expectations for favourable developments and regulations for cryptomarket among crypto enthusiasts in India .Under the latest guidelines issued by the Central Bank of India money can not be withdrawn from crypto currency exchanges .

Hearing on the legality of cryptocurrencies was due in the Supreme Court Of India in july which now has been given a date in september.