A timeline of crypto regulations: From ‘illegal tender’ to G20’s nod

A section of stakeholders have touted this as a pathbreaking step and believe this to be an important step in the run up to a full-fledged regulatory framework for cryptocurrencies, while some call it a work in progress.  

“The adoption of the G20 roadmap on crypto-assets.. is a detailed and action-oriented roadmap that will help coordinate global policy as well as develop mitigating strategies and regulations on crypto assets,” says Ashish Singhal, Co-Founder and CEO, CoinSwitch.

“It is one of the first such initiatives around the world, especially related to emerging technologies, wherein such a consensus has been achieved. It is definitely a game changer, and establishes a precedent for discussions around other emerging technologies world-wide,” says Kiran Mysore Vivekananda, Chief Public Policy Officer, CoinDCX.

Here, we give a timeline of steps that cryptocurrencies went through in its yet unfinished journey to become a legally accepted asset class with a set of well-defined regulations. 

Here is the timeline of regulatory evolution that the digital currencies have undergone:

Feb 1, 2018: Then Finance Minister Arun Jaitley, during the Budget Speech, said government did not consider cryptocurrencies as legal tender or coin and would eliminate use of crypto assets in financing illegitimate activities. But the FM spoke  in favour of blockchain technology.

April 5, 2018: RBI issues a notification restricting banks to enable funds transfer for buying digital currencies. This was challenged in the Supreme Court.

March 2020: Two years later, a three-judge bench of Supreme Court quashed RBI’s notification that had banned the banks from dealing in cryptocurrencies.

Feb, 2021: A high-level committee constituted under the Chairmanship of Secretary (Economic Affairs) suggested that all the private cryptocurrencies, except any virtual currencies issued by the government, be prohibited in India.

Nov 2021: In a reply to a question on bitcoin in the Parliament, Finance Minister Nirmala Sitharaman said that the government has no proposal to recognise Bitcoin as a currency. The government also admitted that it does not collect data on Bitcoin transactions.

Feb 1, 2022: During the Budget speech, Finance Minister Nirmala Sitharaman introduced 30 percent tax on gains made from the sale of cryptocurrencies. 

This was seen as an implicit acceptance of cryptocurrencies. Although without a regulatory framework in place, the government announced to levy capital gains tax, and 1 percent TDS on crypto transactions.  

July 2022: Nirmala Sitharaman during a Parliamentary question said the ban on cryptocurrencies could be effective only with international collaboration on the risks, benefits, evolution of common taxonomy and standards. 

Jan 2023: RBI Governor Shaktikanta Das says bitcoins should be completely banned in India and it can just be called ‘gambling’. 

Sept 1, 2023: The G20 member nations endorsed the Financial Stability Board’s (FSB) recommendations on regulation of crypto assets to mitigate risks associated.

Oct 12, 2023: Finance ministers of G20 nations at Marrakesh, Morocco adopted the synthesis paper released by IMF-Financial Stability Board (FSB) the previous month.  

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Updated: 16 Oct 2023, 12:02 PM IST