Banks and financial institutions regulated by the Reserve Bank of India are not allowed to deal in cryptocurrencies thanks to a ban issued in April. While the ban poses significant challenges for trading, cryptocurrencies are technically legal in the country.
Furthermore, there is a case in court to challenge the ban. The subject, however, continues to rear its head in various government affairs. The latest involves the law commission of India which somehow recognises cryptocurrencies as a legitimate method of payment – at least when it comes to gambling, a subject the body is currently examining.
The report recommends that wagering should be restricted to money alone.
“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.,” the commission recommends in its report to the supreme court of India.
The commission had been tasked with looking into whether sports betting ought to be legalised in the country. It started work in 2016 after it became apparent that’s sports betting was going on despite being illegal.
In its recommendations, the commission notes that “straight-jacket prohibition on gambling has resulted in a rampant increase in illegal gambling, resulting in a boom in black-money generation and circulation.”
Legalising gambling is seen as a way of curbing match-fixing which according to the report is not uncommon in cricket, a popular sport in India. A number of players have been implicated in the vice.
Because of their anonymity, cryptocurrencies are increasingly popular in gambling, especially where the practice is restricted. It also affords participants a greater playing field in terms of gambling sites owing to their speed and universality.
Gambling enabled by cryptocurrencies like bitcoin exploded in 2017 and a number of dedicated gambling coins have been created.
Legalising betting and gambling can indeed bring about more control into the sector. It is not, however, clear how the use of virtual currencies will make the work of enforcement agencies any better given the fact that it is difficult to trace transactions.