Indian Supreme Court Gives Government 4 Weeks to Produce Crypto Regulation

The Supreme Court of India has reportedly given the Indian government four weeks to come up with cryptocurrency regulations before making its ruling on pending crypto cases. The court was set to hear the petitions against the crypto banking ban by the central bank this week.

Government Given a Deadline

The Indian supreme court reportedly addressed the matter regarding cryptocurrency today, Feb. 25. According to Twitter account Crypto Kanoon, a platform for blockchain regulatory news and analysis, the court gave the government four weeks to come up with a clear regulatory framework for cryptocurrencies. After that time, the court will make a decision on the crypto banking ban by the country's central bank, the Reserve Bank of India (RBI). Crypto Kanoon tweeted:

Supreme Court has granted 4 weeks to Indian government as the final opportunity to bring about a policy (rules and regulations) on cryptocurrencies.

he last time the supreme court addressed the crypto case was on Jan. 17 when it decided to hear the petitions against the RBI ban in the last week of this month. In its circular dated April 6 last year, the central bank banned financial institutions under its control from providing services to crypto businesses.

One of the petitioners, the Internet and Mobile Association of India (IAMAI), requested for the RBI ban to be lifted. The IAMAI is an industry body whose members include a number of local crypto exchanges. The association argued that the ban is unconstitutional. It also pointed out to the court that some crypto businesses have suffered because of this banking restriction. Zebpay, for example, shut down its Indian crypto exchange operations due to the banking problem.

Crypto Regulation in India

The government of India has been working on the regulatory framework for cryptocurrencies. The finance ministry set up a panel, headed by Subhash Chandra Garg, Secretary of Economic Affairs, to draft the regulation.

The recommendations by this panel are reportedly being finalized. However, there have been conflicting reports about what they entail. In January, the Ministry of Finance invited reputed law firm Nishith Desai Associates to present its proposals for the country's crypto regulation. Furthermore, the ministry told Lok Sabha, India's lower house of parliament, at the end of last year that "It is difficult to state a specific timeline to come up with clear recommendations" as it "is pursuing the matter with due caution."

Venezuelan Explains How Bitcoin Saves His Family

As the situation in Venezuela intensifies, a local bitcoin user details how he and his family use the cryptocurrency to survive the country's ongoing crisis. Keeping all of his money in bitcoin, he only exchanges small amounts into the hyperinflating bolivar when necessary.

Bitcoin Not Bolivar

Carlos Hernández, a Venezuelan living in Ciudad Guayana, told his story in The New York Times on Saturday about how bitcoin is saving his family throughout the ongoing crisis in Venezuela. Citing the bolivar's daily inflation rate of around 3.5 percent, he wrote:

I don't own bolívars, Venezuela's official currency. I keep all of my money in bitcoin. Keeping it in bolívars would be financial suicide.

He explained that he does not have a bank account abroad and "With Venezuela's currency controls, there's no easy way for me to use a conventional foreign currency like American dollars."

Hernández revealed that cryptocurrency has enabled him to cover his household expenses on his own, noting that his father, a government employee, earns $6 a month and his stay-at-home mom has no income.

His brother also relies on cryptocurrency. Juan, a 28-year-old lawyer, became a freelancer because "in times of hyperinflation, everyone is constantly getting poorer, including a lawyer's clients," Hernández detailed. He added that his brother "had to turn to cryptocurrencies to get paid" because he could not use Paypal, a common way for websites to pay freelancers, due to "exchange controls here allow[ing] Venezuelan banks to use only local currency." Moreover, cryptocurrency helped Juan avoid his money being seized at the borders when he tried to move to Colombia. "Venezuelan military personnel at the borders have a reputation for seizing the money of people who want to leave," Hernández exclaimed. Overall, he concluded:

You could say that cryptocurrencies have saved our family.

Converting Crypto Into Bolivars

In order to buy everyday necessities such as milk, Hernández explained that cryptocurrencies must be converted into bolivars. He uses Localbitcoins to find buyers who use the same bank he does so "the wire transfer can go through immediately," he said, elaborating:

I can't change too many bitcoins at once, though. The government doesn't monitor cryptocurrency transactions (yet), but it does monitor transactions in bolívars — and any worth about $50 or more will automatically freeze your account until you can explain to your bank where the funds come from.

Localbitcoins has been a popular platform for Venezuelans. The trading volume on the exchange has been steadily rising, hitting a record high of 2,487 BTC for the week ending Feb. 9 before settling at 1,939 BTC last week.

Another international exchange platform, Paxful, told news.Bitcoin.com last week that it also saw record volume in Venezuela, which increased 74.66 percent compared to last year. In addition, the number of trades on the platform increased by 118 percent to an average of 61,534 transactions monthly.

Recently the government of Nicolas Maduro published decrees to regulate crypto activities in Venezuela, including taxing remittances.

Charities Using Bitcoin

Like Hernández, charities in Venezuela have also been able to benefit from bitcoin's borderless nature. One such charity is Bitcoin Venezuela, a nonprofit organization that uses bitcoin to raise funds to aid Venezuelans while offering education in basic economics.

For Venezuela's International Children's Day last year, the nonprofit's humanitarian aid project collected bitcoin donations from Paxful and others. It then gave food to a soup kitchen that feeds 1,500 people daily, two orphanages, and distributed hundreds of meals to people on the street.

On Feb. 10, Eatbch, a Venezuelan nonprofit food drive powered by bitcoin cash, celebrated its one-year anniversary. Within a few months of launch, the charity was "giving thousands of meals each week in 23 locations in 6 states of the country," its co-founder described.

Bank of Spain Report: Bitcoin Is a Solution for a System Without Censorship

A recent report published by the Bank of Spain states that Bitcoin is a solution for the creation of a system without censorship. This is in contrast to public comments made by most central bankers who are prone to attack cryptocurrency with little insight into why it is needed.   

Explaining Peer-to-Peer Electronic Cash to Bankers

Banco de España, Spain's central bank and supervisor of the Spanish banking system, recently published a report aiming to explain how Bitcoin works. The document details the functions of the cryptocurrency, as well as analyzing its strengths and weaknesses from the point of view of the established financial order. It also explains that the best way to understand the aims of the new system is by consulting the original Bitcoin whitepaper written by Satoshi Nakamoto.

The report mentions that according to Nakamoto the world needs "an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party." Thus the goal is to create an electronic payment system similar to cash which allows remote payments without the need for the intermediation of institutions such as banks. This is meant to enable truly irreversible payments and reduce intermediation costs.

A System Without Censorship

The report concludes that cryptocurrency was envisioned as a payments system without the possibility of transaction censorship or a central authority with the power to authorize or reject transactions. It states that "bitcoin is an imaginative and elegant solution to this problem" of "the creation of a system without censorship." However the central bank's report also determines that traditional payment systems do not seek to resolve this problem and therefore cryptocurrency is not an alternative to them.

In line with the common position usually expressed by central bankers, the report ends by saying: "Taking into account that for most agents the existence of trusted intermediaries is not a problem, along with the costs and inefficiencies generated when an attempt is made to eliminate these intermediaries, it does not seem that bitcoin, as it currently stands, is going to have a significant impact for the financial sector as an alternative payment system to the traditional channels."

Bitcoin Cash Merchant Acceptance Is Thriving in These 3 Regions

Bitcoin Cash supporters are all about spreading adoption, and many enthusiasts are relentlessly trying to get people to try BCH and merchants to accept the cryptocurrency for payments. Right now, there are three regions in the world with a significant number of BCH merchants: Slovenia, North Queensland, and Japan, areas which continue to add a slew of new brick n' mortar stores every day.

Three Regions With Lots of Bitcoin Cash Accepting Merchants

Bitcoin cash merchant acceptance is growing. According to Marco Coino, there's close to 1,000 retailers willing to accept BCH as a means of payment for goods and services. These merchants can be located all around the world and each country displays the number of retailers who accept BCH in the region. As BCH merchant adoption continues to grow, there are three specific regions in the world that have dense populations of retailers accepting the decentralized cryptocurrency.

Slovenia

At the moment, the Republic of Slovenia has the most merchants that accept bitcoin cash. According to geo-mapping application Marco Coino, the sovereign state located in southern Central Europe has 207 active BCH retailers who accept the cryptocurrency for payments. Slovenia has always been known for doing business as the country is in the middle of important European cultural and trade routes.

Slovenia has 207 merchants according to Marco Coino.

The country has always been crypto friendly as well and most of the BCH merchants can be found in in the capital of Ljubljana, home to an area that is known as 'Bitcoin City.' BCH accepting merchants in Slovenia include the Asan Chill & Lounge Room, the Malibu Bar, AHZ Design, Venera Shop, the Blackout Bar, Potokar, Hot Horse, Soba'Room promenade bar, and Blockmaster.

Many bitcoin cash fans are probably familiar with the name North Queensland because residents have posted so many many stories about the region's BCH acceptance, it's hard not to notice them. At the time of writing, this northern region of Australia is home to 56 BCH accepting merchants. North Queensland has a large Bitcoin Cash meetup, and the area also hosted the country's first BCH-only automated teller machine.

Right now BCH supporters can purchase meals, get their car fixed, and even get work done on their home by paying for the services in BCH. Merchants accepting BCH in the northern part of the Australian state include Bel Paese Pizzaria, Elements Studio, RJ's Mechanical, Dawson Moving & Storage, FNQ Computers, and Toasted Bean Coffee. A denser area of North Queensland BCH-accepting retailers is located in the middle of Condon, Kelso, and the Townsville Conservation Park.

North Queensland BCH supporters are extremely passionate about spreading bitcoin cash adoption.

Ever since Japan legalized cryptocurrency payments, the region has become a digital currency hub. Japan also has a ton of BCH merchants that accept the cryptocurrency for goods and services. According to the Marco Coino application, there are roughly 56 BCH accepting merchants in Japan.

Japan

Retailers accepting the cryptocurrency here include the Village Hostel Namba, Hikari Clinic, Ruins Minakami, Good Heavens, Rakan, Yakitori Wine Bar, Ginza Secret, Organic Hair Salon, So Law Office, Cafe de Perle, Soul Food House, and Two Dogs Taproom. The Tokyo BCH meetup is extremely large as well, as the group currently has 1,253 members. One member of the Japanese BCH community is Akane Yokoo, a passionate supporter who is responsible for spreading a lot of merchant adoption throughout Tokyo.

Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

India's supreme court has set a new date to hear the petitions against the cryptocurrency banking ban by the country's central bank. Meanwhile, the crypto community in India is campaigning on social media for "positive regulations" and the rollback of the banking ban.

New Supreme Court Hearing Date

Indian Court Moves Crypto Hearing, Community Calls for Positive RegulationsThe Supreme Court of India has reportedly set a new date to hear the petitions against the crypto banking ban by the Reserve Bank of India (RBI). The central bank issued a circular in April banning all regulated financial institutions from providing services to crypto businesses. Banks complied and closed accounts of crypto exchanges by July.

A court document circulating on Twitter on Thursday indicates that the supreme court has scheduled Jan. 15, 2019, as the date it will revisit the crypto case.

The court originally scheduled to hear the case on Sept. 11 but continually postponed it. Then, on Oct. 25, it directed the government to submit a counter affidavit within two weeks, detailing its crypto regulatory progress.

According to Quartz India, the government has filed a counter affidavit with the supreme court, stating that it expects the regulatory framework to be finalized in December.

On Saturday, Inc42 reported that the finance ministry's counter affidavit defends the RBI banking ban. The news outlet wrote:

Representatives from the finance ministry submitted that the RBI circular as well as warnings issued by finance ministry on December 29, 2017, and by finance minister Arun Jaitley in his budget speech on February 1, 2018, are in line with the first inter-ministerial (interdisciplinary) committee's recommendations on cryptocurrencies.

The finance ministry set up an inter-ministerial committee in November last year, led by its Economic Affairs Secretary Subhash Chandra Garg, to recommend crypto regulatory measures. The publication noted that this committee has "yet to draft its report." Its next meetings are in December and January.

Community Campaigns for 'Positive Regulations'

The CEO of Indian cryptocurrency exchange Wazirx, Nischal Shetty, started an ongoing Twitter campaign on Oct. 31, calling for "positive regulations" for the Indian crypto industry. Shetty, who has over 55,100 followers on Twitter, wrote:

Please bring positive regulations in crypto and over 5 million crypto Indians will be thankful to you. Youth of India have found a new way to make wealth & this is especially important when there are not enough jobs for everyone.

He added, "We need to tweet to our ministers every day till we get [a] reply. The more we tweet the more chances of our voices being heard and crypto getting a positive regulation in India."

Shetty plans to continue the campaign "till the time the government takes a positive stance on regulating cryptocurrency in India," Inc42 quoted him emphasizing. The CEO elaborated:

We are worried about the RBI's banking ban on crypto. It has hampered the entire crypto sector of India and the innovations that come along.

In addition, the news outlet noted that crypto exchange Bitbns started a campaign on Change.org, demanding the repeal of the RBI circular. This petition has garnered 44,626 signatories at press time.

SEC Commissioner Suggests Excessive Crypto Regulation Hurts Growth

A commissioner at the US Securities and Exchange Commission (SEC) has said that the official regulation of cryptocurrencies could actually stunt the technology's development. Hester Peirce's comments come at a time when the SEC has been accused of acting contrarily and gives hope to those wanting governments to take a step back to prevent over-regulation

U.S. Securities and Exchange Commissioner Hester Peirce was speaking at the University of Missouri School of Law on Feb. 8 when she hinted that government regulation could actually cause the crypto industry difficulties. The lawyer, who has been nicknamed the "Crypto Mom" for her generally positive comments towards cryptocurrencies, said that it may be a better idea for regulators to step back and allow blockchain projects to mature, and that hastily drawn up regulations could harm the industry:

We might be able to draw clearer lines once we see more blockchain projects mature. Delay in drawing clear lines may actually allow more freedom for the technology to come into its own.

Peirce said that she would keep an eye on ensuring no laws harm crypto projects, citing stablecoin Basis, which is shutting down and returning its $133 million in capital to investors due to the difficulty of complying with securities regulations. "I am not going to comment on what I think about the merits of any particular project or how the securities laws apply to it, but my antennae will go up when apparently legitimate projects cannot proceed because our securities laws make them unworkable," she said.

Peirce further added that the SEC could at times be overly negative towards cryptocurrencies, and that this is something that needs to change: "We rightfully fault investors for jumping blindly at anything labeled crypto, but at times we seem to be equally impulsive in running away from anything labeled crypto. We owe it to investors to be careful, but we also owe it to them not to define their investment universe with our preferences."

Diverse Perspectives Needed

Peirce's comments come at a time when the SEC's views on cryptocurrencies haven't been wholly clear. Last year the SEC rightly took enforcement action against initial coin offerings and other crypto companies perpetrating fraud. But, as Peirce noted, this doesn't mean regulators and government agencies should be automatically skeptical about everything to emanate from the cryptocurrency sector.

As Angela Walch, a professor of law at St. Mary's University School of Law and a research fellow at the Centre for Blockchain Technologies at University College London previously said, it is important for regulators to have a "diverse perspective," as all too often they can be overly focused on protecting the financial system and indifferent to innovation and the benefits cryptocurrencies could bring.

Indian Government Concerned Cryptocurrencies Could Undermine the Rupee

The Indian government panel tasked with drafting crypto regulation is reportedly worried that cryptocurrencies could destabilize the rupee if they are accepted as payments. Its concern came to light despite evidence that cryptocurrencies do not currently pose a threat to financial stability.

Impact on the Rupee

The Indian government committee tasked with developing the regulatory framework for cryptocurrencies is reportedly "obsessed" with the impact they may have on the rupee if they are allowed to be used in payments, Quartz India reported. The committee is headed by Subhash Chandra Garg, Secretary of the Department of Economic Affairs.

"If bitcoin and other digital currencies are going to be allowed to be used for payments then whether it will end up destabilising the fiat currency is a major concern" for Garg's panel, the publication quoted an unnamed representative from the crypto ecosystem who recently met with the ministers as saying. "The overall impact on the financial ecosystem that it is likely to have is still unclear and it has been a challenge to convince them on this particular point."

If bitcoin and other digital currencies are going to be allowed to be used for payments then whether it will end up destabilizing the fiat currency is a major concern.

Garg's panel is finalizing its report containing the recommendations for the country's crypto regulation, according to the government's reply to a Right to Information filing.

However, the Ministry of Finance told Parliament that "It is difficult to state a specific timeline to come up with clear recommendations" and that Garg's panel is "pursuing the matter with due caution."

No Threat to Financial Stability

The Financial Stability Board (FSB) published a report in October last year on the financial stability implications of crypto assets. The FSB is an international body that monitors and makes recommendations about the global financial system to the G20, an international forum for governments and central bank governors. Its members are financial regulators and central bankers from 24 countries as well as global organizations such as the International Monetary Fund.

Cryptocurrencies need constant monitoring on overall financial stability considerations, given the rapid expansion in their usage.

The FSB report states that "Based on the available information, crypto assets do not pose a material risk to global financial stability at this time." Nonetheless, it notes that "vigilant monitoring is needed in light of the speed of market developments. Should the use of crypto-assets continue to evolve, it could have implications for financial stability in the future."

Citing the FSB's finding, the Reserve Bank of India (RBI) reiterated in its Trend and Progress of Banking in India 2017-18 report that cryptocurrencies are not a threat currently. "The market continues to evolve rapidly, however, and this initial assessment could change if crypto assets were to become more widely used or interconnected with the core of the regulated financial system," the central bank detailed. "Cryptocurrencies need constant monitoring on overall financial stability considerations, given the rapid expansion in their usage," the RBI concluded.

Kraken Acquires British Derivatives Platform Crypto Facilities

Cryptocurrency exchange Kraken has acquired Crypto Facilities, a British digital asset trading platform and index provider, in an undisclosed "nine-figure" deal. The acquisition means that Kraken will now be able to offer both spot and futures trading in bitcoin core, bitcoin cash, ripple, litecoin and ethereum while boosting revenue by attracting institutional customers.

Deal Turns Kraken Into a One-Stop Shop'

Kraken chief executive officer Jesse Powell has revealed  to U.S. magazine Fortune that the San Francisco-based company was on the verge of completing a $100 million funding round from its "larger customers."

Commenting on the Crypto Facilities deal, 10 months in the making, Powell said the acquisition reinforces Kraken's thrust on creating complementary services to its core spot exchange and over-the-counter trading. He stated that the exchange had since integrated the back-end operations of Crypto Facilities, allowing investors from both companies to trade on a single platform.

Users now have access to futures on six cryptocurrency pairs, "providing a highly efficient way to trade and hedge cryptocurrency in any market environment," he said in an email to news.Bitcoin.com. For U.S. customers, futures trading will, however, not be available. The U.K.'s Financial Conduct Authority has already approved the transaction, according to Kraken.

Of his company's largest acquisition yet, Powell said:

We are excited to introduce eligible clients to these industry leading futures and index products. Over the coming months, our teams will continue to enhance and expand these offerings. We've got great stuff in store for traders and institutional clients in 2019.

Founded in 2015, Crypto Facilities offers derivatives trading in cryptocurrencies like BTC, BCH, XRP and ETH to both individual and institutional investors. The London-based platform is the latest in a series of acquisitions by Kraken since 2016. The company, with four million global users, has previously acquired bitcoin exchanges Coinsetter, Cavirtex and Clevercoin. Kraken also bought Glidera, a wallet funding business, and Cryptowatch, a trading and portfolio tracking platform.

Timo Schlaefer, chief executive officer of Crypto Facilities, who will continue in his current role, said: "It has been our mission to build the most sophisticated, powerful and user friendly cryptocurrency trading platform. Teaming up with Kraken allows us to innovate the next generation of products and tremendously boosts the value we are able to provide to our clients."

Kraken Raises $100 Million in New Funding

Meanwhile, Kraken CEO Powell told Fortune that the exchange was close to completing a $100 million fundraising effort. To raise the money, Kraken sold some of its larger customers a stake in the company, he said. Kraken's earlier investors include Hummingbird Ventures, Blockchain Capital, and Digital Currency Group. Powell reportedly refused to name the new investors.

Much of the new investment originated from outside the United States, noted Powell, adding the raise did not need U.S. Securities and Exchange Commission approval because the company "only approached accredited investors and others covered by an exemption."