“India’s application to create a regulator of cryptocurrencies and investments into cryptocurrency is a serious step ahead of the curve. A lot of experts are skeptical about India’s economic policy, but this time skepticism only makes it difficult to comprehend the reality.” This opinion was expressed in an interview with the Information Agency “External Economic Relations” by Chairman of Fund for Protection of Investors’ Rights in Foreign States Yaroslav Bogdanov.

The expert commented on the news that the Indian government is developing a legal framework for cryptocurrencies. It will be ready by February 2022. Instead of completely banning cryptocurrencies in the country, the state decided to regulate this sector.

It is reported that India may allow bitcoin and altcoins as legal means of payment on its territory. It is noteworthy that earlier the authorities planned to completely ban the circulation of cryptocurrencies for citizens and even wanted to introduce criminal punishment for mining. However, now they have changed their point of view on this issue completely.

- A country with serious social problems, at the same time well integrated into the English-speaking world, has identified priorities in cyberspace, which I and our team have been talking about for years. India will create a full-fledged legal framework “to regulate and manage the growing cryptocurrency investment market,” where digital assets will be regulated as a full-fledged asset class.

The law should be published on February 1, 2022. In practice, this is an application for digital arbitration, a huge densely country is ahead of many “digital powers”. The fact is that the principles of digital arbitration and contract regulation on one hand are very simple, on other hand they require significant investments in digital infrastructure, and, of course, legal competencies.

For example, the basic principle of contract law is that in each agreement there are three parties, conditionally: the customer, the contractor and the state and/or the holder of legal norms, within which parties reach their agreements. In digital arbitration, the regulatory system is chosen by agreement of the parties and the regulator’s mission is to select the most optimal analogues from among already existing legal systems. Ideally, parties can choose which legal norms to apply and which classifications of legal paradigms to adhere.

That is, the regulator’s arsenal should have digital models of basic legal concepts, including division into Romano-German and Anglo-Saxon, national legislation, hybrid legal forms, and so on. If the parties agree, conditionally, to work within the framework of English law, then the digital arbitrator must prescribe an appropriate roadmap, obligations, responsibilities, and so on. In the case of a model change, as the works indicated in the digital contract are completed, it is necessary to justify this, as well as offer a more optimal, for example, Russian legal system, which will also be reflected in a blockchain protocol. To clarify relations, the parties do not need to go to London or Moscow, it is enough to clarify relations online.

In the described case, an interesting and intellectually intensive practice worthy of our lawyers is outlined, corresponding to their spirit and knowledge of domestic law schools. Digital arbitration in Russia could become an alternative to the LegalTech industry, which is actively promoted in the countries of  British Commonwealth.

India is taking the next step by making appropriate decisions at the government level. In our country, despite the GDA’s developments and excellent legal competencies, the authorities have not yet decided to form an infrastructure of the crypto economy” Yaroslav Bogdanov expressed his point of view.