The state of cryptocurrencies in India has mostly been in limbo. India has dabble with the idea of regulating the crypto market, but no action has been taken so far. When investors least expected it, PM Mori and the Reserve Bank released a statement that the government is looking to ban ‘private cryptocurrencies’ and focus its efforts on a government-backed digital currency. The regulatory framework is not yet in place, but is expected to come in the winter sessions.
Final Call on the Regulator Framework Coming Soon
On Thursday, PM Modi held a meeting with stakeholders including the RBI on the topic of unregulated cryptocurrencies in India. The meeting concluded with an agreement of a bill that will fully ban private cryptocurrencies and a partial ban on all crypto products with regulation.
The government may also consider restrictions on exchange-to-exchange transfers. There will almost surely be a system implemented that will monitor all Rupee transactions in and out of crypto exchanges. In order to run legally in India, exchanges must agree to open their ledgers for the government every quarter.
India’s capital market regulators will oversee all crypto transactions. The government will give crypto holders a deadline to declare their assets or they will have to pay a fine. A jail term of up to 1.5 years is also considered. The bill refers to crypto assets in order to avoid confusion with the upcoming RBI digital currency.
According to finance minister Nirmala Sitharaman, the government has reworked the original bill recently. Originally, it proposed a ban on all cryptocurrencies and exchanges. It’ll be interesting to see when the bill goes live and how it impacts the state of cryptos in India. With millions of Rupees flowing in and out, it has definitely angered exchanges and investors.
Regulation is important to secure the industry and make it even stronger. Banning it will not be a solution. If the govt plays a strategic role in regulating the industry there will be more people gaining confidence.
I think it is very simple that the govt. of a country will try to regulate cryptocurrency in their country. There are many reason for that.