Recent report from the Economic Times suggests that the India government may regulate crypto as assets, not as currencies. If this ends up being the case, it will allow Indians to hold cryptocurrencies as investments only, just as it treats bonds, gold, and shares. In such a scenario, using crypto to pay for goods or services or to transact in India may be banned in the country.
The possible plan to limit cryptocurrency dealing to investments in India looks like the result of a compromise between the regulators and the innovators. This is particularly against the backdrop of a 2018 ban of crypto by the Reserve Bank of India and the eventual overturning of that decision two years later by the Supreme Court of India.
“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,” Tanvi Ratna, founder and CEO of think tank Policy 4.0, reported CoinDesk.
With crypto being limited to investments, the Securities and Exchange Board of India (Sebi) is most likely to become the regulator under the new legislation.
According to an Economic Times report, the legislation in the works could reach the cabinet for consideration in the next two to three weeks. A crypto regulation bill is also expected to be presented in the India Parliament’s winter session.
In a note prepared by the Confederation of Indian Industry (CII) for Indian parliamentarians, a “balanced and thoughtful regulatory approach to crypto/digital tokens needs to be evolved in India” is recommended.