Key Takeaways:
- India to ban crypto as a payment method, but it could be regulated as an asset similar to stocks, gold, or bonds.
- According to a sources, active solicitation would be prohibited.
- The Securities and Exchange Board of India (Sebi) may be appointed as the regulator.
- The bill is expected to be introduced in Parliament during the upcoming winter session.
The government is unlikely to ban cryptocurrencies completely, preferring instead to take a cautious approach. They may not be accepted as a form of payment or settlement, but they could be held as an asset similar to stocks, gold, or bonds. According to people familiar with the situation, active solicitation by companies, such as crypto exchanges platforms, would be prohibited. The government is finalizing legislation that will regulate crypto asset trading while banning virtual currencies for payments and transactions.
The bill’s details are still being worked out. However, the proposed legislation could be presented to the cabinet for consideration in two to three weeks. Although a final decision has yet to be made, India’s Securities and Exchange Board (Sebi) may be appointed as the regulator.
The government is also working on taxation issues addressed in the upcoming legislation as per the government sources. The bill is expected to be introduced in Parliament during the forthcoming winter session. The parliamentary standing committee on finance, which met with crypto industry representatives on Monday, appeared to support regulation rather than a complete ban, as industry representatives espoused. On Monday, the government held a meeting with representatives from the crypto industry, following a series of closed-door discussions between the government and the Reserve Bank of India (RBI) in recent days.
Ratna said that
“Regulating cryptocurrency as an asset does not address all of the issues that authorities are concerned about, but it does remove it from the currency arena, which is one of the RBI’s concerns. Defining the asset class is the most challenging part, adding that current discussions about regulating cryptocurrency as a commodity aren’t a good fit. Other RBI concerns, such as financial stability, capital controls, and exchange rate risk, are more difficult to address.”
