The regulatory environment surrounding cryptocurrencies in India is now a little clear. As per reports from the local media and other prominent outlets, India is moving forward with the regulation of cryptocurrencies in the country. There is no plan on an outright ban of digital assets.
India to regulate crypto
Previous reports suggested that the Prime Minister of India, Narendra Modi, and the Indian authorities are taking a “progressive” stance on cryptocurrencies. However, the following reports suggested that a ban on “private cryptocurrencies” will follow with no explanation on the same.
As per NDTV’s report, a Cabinet note was circulated by the government, which suggests the regulation of cryptocurrencies instead of imposing a ban on the same. NDTV reporter Sunil Prabhu claimed that the note from the Cabinet said that the SEBI or Securities and Exchange Board of India would oversee the regulation of these blockchain-based assets.
What about investors?
As per the note, the investors will receive a time frame to declare their profits and holdings. Furthermore, they will have to transfer the funds to exchanges regulated by the authorities. This suggests that authorities might ban private wallets. Also, the Government of India is not allowing the usage of cryptocurrencies for payments.
The efforts are being made to prevent money laundering and terror financing, as Prabhu states. On the other hand, the proposal to establish a CBDC or central bank digital currency is put on hold as the government wants to focus on the regulation of the crypto sector for now.
In all, India is declaring cryptocurrencies as an asset class and not as legal tenders. Providing an overview of the provision of the bill, the creator of the original version of the bill, former Finance Secretary Subhash Garg, said that “it is misleading to say that private cryptocurrencies will be banned and to intimate the government about the same.”