India has had a hot and cold relationship with digital currencies over the past few years.
As deliberations continue on crypto regulations, certain aspects can be debated for a long time before digital currencies are announced as legal tender in the country. For example, there have been lengthy discussions about whether cryptocurrencies should be considered virtual currencies or commodities or assets. Last week, Prime Minister Narendra Modi chaired a meeting to discuss the future of cryptocurrencies amid concerns that unregulated crypto markets could become avenues for money laundering. and terrorist financing.
Here are 10 facts about how cryptocurrencies can be handled in India:
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The Center may prohibit the use of cryptocurrencies for transactions or payments, but allow them to be held as assets such as gold, stocks or bonds, Economic Times reported on Wednesday.
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The report, citing sources, claims that the approach would avoid implementing a ban outright as the government wants to prevent crypto companies, including exchanges and platforms, from actively trying to attract new investors.
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The Securities and Exchange Board of India (SEBI) could be appointed as the regulator, although that has yet to be finalized, the report added.
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The crypto community has raised several representatives on behalf of the Indian authorities asking to be classified as an asset instead of a currency, in order to gain acceptance and avoid bans.
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India and Cryptocurrencies: India has had a hot and cold relationship with digital currencies over the past few years. In 2018, it effectively banned cryptocurrency transactions, but the Supreme Court lifted the restriction in March 2020.
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RBI Accepts Cryptocurrencies: The Reserve Bank of India (RBI) has so far shown great reluctance in accepting cryptocurrencies, voicing concerns about the potential risks to macroeconomic and financial stability and control. capital control. RBI Governor Shaktikanta Das has stated that India needs further discussions on the issue of cryptocurrencies. “When the central bank says we have serious concerns from a macroeconomic and financial stability standpoint, there are deeper issues involved. I haven’t seen serious discussions yet. complete, well-informed public space on these issues”. Das said.
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However, the Reserve Bank is working on a digital currency. The government can introduce a cryptocurrency bill to the cabinet for approval. The new bill could be introduced during the winter session of the National Assembly starting November 29.
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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.
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‘Imposing strict crypto rules’: There have been calls in India to impose stricter rules on crypto transactions as the unregulated environment could push more domestic savings into the asset class and could cause a negative impact. dangerous for household savings.
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The Reserve Bank and market regulator SEBI have also voiced concerns about the unregulated growth of cryptocurrencies in India, noting vulnerable retail investors.
