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4.97 Neutral Environment
In India, interest in cryptocurrencies emerged at the end of 2016, after the government of India on November 8, 2016 announced withdrawal of 500- and 1,000-rupee notes that accounted for up to 86% of India's total money circulation. Many residents of India tried to safeguard themselves against the collapse of the Indian economy, and started buying Bitcoins. The three largest Bitcoin exchanges in India, Zebpay, Unocoin, and Coinsecure, noted a rapid growth of the number of users.
In May 2017, India accounted for 10% of the global cryptocurrency trade. In September 2017, more than 1.5 million owners of Bitcoin wallets (out of 15 million) were in India, with its population of over one billion people.

The surge of interest in cryptocurrencies could not be ignored by the government and the Reserve Bank of India (RBI). Back in 2013, the Reserve Bank of India issued a warning stating that Bitcoin and other cryptocurrencies could be used to launder money or finance terrorism. Although the bank did not prohibit Bitcoins, this resolution became a clear signal to Indian traders about the possible risks associated with cryptocurrency trade. Similar warnings were issued by the bank in February 2017 and in December of the same year.

In April 2018, the Reserve Bank of India instructed financial institutions to stop their engagement with cryptocurrency exchanges and investors within three months' period. In response to the actual prohibition of operations with cryptocurrencies, crypto exchanges as well as citizens sued the RBI. The final court hearing in the Supreme Court has been repeatedly postponed because not all parties submitted requisite information to the court. As a result, the ultimate court session, which India is looking forward to, has not been held yet.

At the same time, services and applications based on the blockchain technology are already being introduced in India at both the state and federal levels.
Rather Enabling Political Environment
7.0 points
The situation with cryptocurrencies in India resembles a thriller with an unpredictable ending, which has been on for more than a year now, involving all branches of the government and about 2 million citizens. The final decision on either the legalization or prohibition of cryptocurrencies has not been made yet. At the same time, India has huge potential in the development of the blockchain technology and successfully implements this potential within the framework offered by regulators. However, regulators seek a balance between the benefits of using the blockchain technology and threats carried by cryptocurrencies beyond the control of the authorities. But so far, apart from the ban, no other options have been proposed by regulators.
Not Enabling Legal Environment
1.30 points
Regulatory Convergence
There is no special comprehensive legislation to regulate relations in the field of the blockchain and cryptocurrencies. Regulators still adhere to the prohibitive approach in the regulation of cryptocurrencies. Given that the ban imposed by the RBI is currently the only regulatory act in the field, it is difficult to assess convergence. However, at the same time, in India, a working group was created at the government with a view to drafting a regulatory framework for cryptocurrencies.

Definiteness of Legal Regulation
There is no special legislation that regulates all issues related to blockchain and cryptocurrencies in the country. The status of cryptocurrency in India is not defined. Due to the ban imposed by the RBI, individuals cannot perform operations with cryptocurrencies in the country's financial institutions. Nearly all operations with cryptocurrencies were banned: maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase/sale of VCs.

Stability of Legal Regulation
The crypto industry in India has literally been torn apart by statements of regulators, the prohibitions imposed by the Reserve Bank and the ongoing proceedings in the Supreme Court.

It is expected that the issue will be resolved within a year with the decision of the Supreme Court concerning the ban if cryptocurrencies' transactions that will become the basis for the development of the necessary legislation. At the same time, we cannot make any forecasts whether this legislation will be formulated in a positive way, or will appear negative and prohibitive.

Adequacy of Legal Regulation
In fact, cryptocurrencies are outside the legal field, their status is undefined. Moreover, the existing regulation by the Reserve Bank is formulated in a prohibitive manner: financial institutions cannot work on their own or provide cryptocurrency services to other persons and companies. Regulation of mining, ICOs, taxation is not clear or completely absent.
Situation with the Rule of Law
India has average indicators of the rule of law, ranking 62th in the world among 113 countries. The conditions of the legal regulation of blockchain and cryptocurrencies are not enabling, and since the values of the sub-criterion of the rule of law are low (0.52), the amount of the difference between weighted (multiplied by Rule of Law Index score) and unweighted assessments are significant. This indicates high risks associated with the general conditions of compliance with legal safeguards in India.
Enabling Infrastructure Environment
6.61 points
India is the world's 96th country out of 193 in the UN E-Government Development Index and the world's 100th country by the overall ease of doing business.