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Thursday, June 1, 2023

Crypto Will Be Regulated, Not Banned In India: Cabinet Documents

According to reports from local media, the Indian government is not planning an outright ban on crypto and will instead regulate it.
Earlier this month, Cointelegraph reported that the Indian government was considering a bill that would create an official digital currency while banning private cryptocurrencies.

On the following day, the news sparked panic selling on the local crypto exchange WazirX, and the vague wording of the bill and lack of clarification from the government has left many confused about the prospects for crypto in India.

On Dec. 2, NDTV reported that it had obtained details of a cabinet note circulating in the government regarding the proposed crypto bill.

NDTV reporter Sunil Prabhu reported that the note contained suggestions for regulating cryptocurrencies as crypto assets, with the Securities and Exchange Board of India (SEBI) in charge of regulating local cryptocurrency exchanges.

Prabhu says investors will be given a certain time frame to declare their crypto holdings, and they must transfer them to exchanges regulated by SEBI, which suggests private wallets may be banned. According to him, the government is trying to prevent money laundering and terrorism financing.

Additionally, Prabhu said that the government will hold its plans for a central digital bank currency with the Reserve Bank of India (RBI) to focus on the crypto sector. There will be no recognition of crypto assets as currency or legal tender, suggesting that it is attempting to provide a clear distinction between the two:

It is absolutely clear that cryptocurrency will not be accepted as legal tender. Even the prime minister made that very clear during his deliberations at that meeting.
“I think the RBI will develop a CBDC as a standalone virtual currency at a later stage, so you can expect it soon, but it will occur at a later stage,” he said.

Some Indian crypto investors have welcomed the NDTV report. “ultron290196” posted in the r/cryptocurrency subreddit about being relieved not to have to worry about an outright ban.

Our Indian crypto movement seems to be gaining notice by the government, which has finally decided to regulate cryptocurrencies as crypto “assets” rather than legal tender. We Indians can breathe a sigh of relief. They said, “I’d rather pay some tax than become an outcast.”.

With “No-Incident-8718” writing, “here’s the catch,” not everyone was pleased with the details. Exchange wallets were the only way to store funds. Using Indian exchanges was also the only option.”

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