Addressing the concerns of RBI, India may have arrived at a stand to ban the use of cryptocurrencies for transactions or making payments, but allow them to be held as assets like gold, shares or bonds, as reported by the Economic Times on Wednesday.
In spite of the fact that the government was keen on completely banning crypto-assets and related functionalities, after the meeting and negotiations held yesterday the company has arrived at the conclusion that the best way out would be to implement a partial ban.
The crypto community has made several representations to Indian authorities asking to be classified as an asset rather than as a currency, in order to gain acceptance and avoid a ban, sources close to the matter said.
India’s Prime Minister Narendra Modi last week chaired a meeting to discuss the future of cryptocurrencies amid concerns that unregulated crypto markets could become avenues for money laundering and terror financing, sources had said on Saturday.
A person aware of discussions at that meeting said that the overall view within government is that steps taken should be proactive, “progressive and forward-looking” as cryptocurrencies represented an evolving technology, the newspaper reported.
The government plans to present a crypto regulation bill in the parliament’s winter session, details of which are being finalised. The bill appears to have changed course from the earlier plans to ban crypto in the country. The cabinet could receive the proposed legislation in the next two to three weeks for its consideration.
In the bill, authorities will also ban “active solicitation” from crypto firms, including exchanges and platforms, ET reported. The Securities and Exchange Board of India (Sebi) could be designated as the regulator, though that has not been finalised.
The issue of advertising has triggered a “big debate,” with some thinking that ads mislead youth, Tanvi Ratna, founder and CEO of the think tank Policy 4.0 told CoinDesk.
Crypto exchanges WazirX and Bitbins have paused their ads, ET also reported. A WazirX spokesperson said that the exchange stopped advertising in August, adding that ET’s headline is misleading, while CoinDCX declined to comment on the report.
The Reserve Bank of India has so far appeared very reluctant to accept cryptocurrencies, expressing concerns over potential risks to macroeconomic and financial stability, and capital controls.
India’s digital currency market was worth $6.6 billion in May 2021, compared with $923 million in April 2020, according to blockchain data platform Chainalysis.
RBI Governor Shaktikanta Das also took a cautious stance on cryptocurrencies in his speech last week.