The cryptocurrency sector in India still operates under uncertainties as the government is yet to decide how to treat cryptocurrencies.
The Indian government will propose a new cryptocurrency bill to the parliament, and recent reports have indicated that the government wants to ban private cryptocurrencies. However, the CEO of cryptocurrency exchange ZebPay said it is highly unlikely that the government will ban cryptocurrencies.
Instead, he stated that the government would look to regulate cryptocurrencies instead. Avinash Shekhar, co-CEO of Zebpay, told CNBC's Squawk Box Asia that the government might introduce tightened rules regarding cryptocurrencies. He said;
"My belief is that we will have some kind of coherent regulation, but on the tougher side. The feelers which we are getting from the government is that they're looking for some kind of regulation, strict regulation, but not a complete ban."
The Indian central bank is also looking to launch the digital rupee as numerous central banks around the world start working on their digital currencies. The apex bank is planning to launch a pilot of its digital currency in the second quarter of next year.
Shekhar said the government's view on cryptocurrencies over the past few months has changed after consulting with various stakeholders. He felt that the government had learned more about cryptocurrencies in recent months. The Zebpay boss said;
"There has been lots of positive vibes from the government. We met the finance committee of Parliament around two weeks back. The message or the feelers which we are getting from the government is that they're looking for some kind of regulation — strict regulation, but not a complete ban."
Earlier this year, the government had planned to ban cryptocurrencies and fine Indians trading cryptos or holding the assets. However, the government has changed its stance since then and is now trying to heavily regulate the crypto space and discourage people from investing by imposing hefty capital gains and other taxes.