Indian State Working to Help Cryptocurrency Businesses Grow
An Indian minister has reportedly revealed that a state government is working to protect businesses operating without a regulatory framework in India. They include cryptocurrency exchanges and crypto-accepting merchants. The move follows the arrests of the founders of a crypto exchange after they tried to set up an ATM-like kiosk at a local mall.
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India’s Social Welfare Minister Priyank Kharge has reportedly revealed that the Karnataka state government “is working on setting up an Innovation Authority” with the aim “to protect consumer-friendly technology businesses that are operating in regulatory grey areas,” the Economic Times reported.
“Technologies are fast changing and our policies are only trying to catch up,” he told the news outlet on Monday. “Instead of banning a people-friendly business on the grounds that the regulations do not allow it, the Innovation Authority would intervene to come up with a quick policy framework.” The minister elaborated:
For example, bitcoins are traded in restaurants in Bengaluru, and we will need to interact with the government and get a regulatory clarity instead of banning those technologies for which regulations are not yet in place.
Confusion Over Unocoin’s Kiosk
Cementing his point about the need for innovation-friendly policies, Kharge referred to the recent arrests of Unocoin founders, the publication conveyed.
Unocoin, one of India’s largest cryptocurrency exchanges, is based in Bengaluru, the capital of Karnataka. Following the crypto banking ban by the country’s central bank, the Reserve Bank of India (RBI), the company placed a machine in a local mall in October to handle fiat deposits and withdrawals for its customers. This machine was originally marketed as a Unocoin ATM but the company soon rebranded it to a kiosk.
The Bengaluru cyber crime department soon seized the machine and arrested the company’s founders, CFO Harish BV and CEO Sathvik Vishwanath. “The detaining was on the accusation that we as a company were not having necessary approvals to set up an ATM,” Unocoin explained in a statement on Tuesday.
According to the exchange, the police took the stance of “The ATM kiosk installed by Unocoin at Kemp Fort Mall has not taken any permission from the state government and is dealing in cryptoasset outside the remit of the law.” The company argued:
Since this is a private kiosk, there isn’t any need for procuring any license or an approval of any sort from authorities. Kiosk machines of Unocoin do not fit RBI’s definition of ATM which connects to the banking network.
Police Questioned Legality of Cryptocurrency
Unocoin clarified that “The situation finally came under control once the police authorities understood our initiative in its original intent.” The exchange added that the authorities were also “made aware that we haven’t violated any law in setting up the kiosk and thereby the whole fiasco came to a speedy conclusion albeit some formal legal proceedings.”
Regarding the kiosk, Vishwanath told news.Bitcoin.com that so far the police “have understood” that it is not an ATM. However, he noted:
Because they have started a legal proceeding, it will take its own sweet time and course before the issue gets cleared.
Prior to his arrest, the Economic Times quoted Vishwanath explaining that cryptocurrency is not illegal in India. He emphasized that the statement by the country’s finance minister “was clear: cryptocurrencies are not legal tender in India. He did not say ‘illegal tender.’ There’s a huge difference.”
The CEO told news.Bitcoin.com:
Their [police’s] main concern is around the legality of crypto assets itself, and it is difficult to make the police understand the regulatory stance of our country as the topic is quite new to them.
What do you think of this Indian state government trying to help the crypto industry? Let us know in the comments section below.
Images courtesy of Shutterstock and Unocoin.
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