India’s upcoming crypto bill is expected to ditch earlier plans of banning digital assets in the country
India is considering allowing citizens to hold cryptocurrency as an asset instead of imposing a blanket ban on the use of digital currencies in the country.
While government officials are still opposed to permitting the use of virtual tokens as a medium of exchange, a nuanced approach based on the regulation of the crypto market is being explored, local news agency Economic Times reported.
After over a year of India’s crypto community trying to explain the pitfalls of completely banning digital assets in the country, regulators held a meeting with crypto industry representatives earlier this week.
This meeting is part of a series of closed-door discussions between government officials and the Reserve Bank of India, India’s central bank that has taken place in the last few weeks.
The government is expected to present a bill detailing the country’s approach to cryptocurrencies in the winter session of the parliament.
Among the regulators’ conditions to allow the functioning of the crypto market in the country is a ban on active solicitation by companies including exchanges and platforms, sources from the government told ET. Major crypto exchanges in India including WazirX and Bitbins have already paused advertisements.
Tanvi Ratna, founder and CEO of the think tank Policy 4.0 said that the issue of advertising has generated a huge controversy with many claiming that ads mislead youth. However, the trickiest part of the regulation is defining the asset class that crypto will fall under, she explained, adding that the current discussion to regulate crypto as a commodity is not favourable:
“Regulating crypto as an asset doesn’t solve all the issues that authorities are concerned about, but it does take it out of the currency arena, which is one of RBI’s worries.”
She further noted that the RBI’s concerns regarding financial stability, capital controls, and exchange rate risk will be more complex to solve.