The proliferation and booming interest in blockchain technology and cryptocurrency have triggered repeated calls for financial regulation around the world. India now joins a growing list of countries like the U.S., Brazil and Pakistan that have talked about the prospect of regulating virtual currencies, following legislation in the U.K., Singapore and Canada.
India Finance Minister Nirmala Sitharaman said the government is preparing to introduce a new cryptocurrency bill, with a draft currently awaiting Cabinet approval, Finance in Bold reported. Under the upcoming bill, cryptocurrencies likely would not be accepted as legal tender. Instead, they would be recognized as a tradeable asset class that has a market. There could also be a provision that offers an exit option for individuals who have already invested in the digital currencies.
But remarks detailed in a recent report by a high-level committee to study issues on cryptocurrencies, led by Economic Affairs Secretary Ajay Seth, take a firmer stance, recommending strict measures to ban all private cryptocurrencies in India, with the exception of state-issued digital assets, according to Finance in Bold.
The recommendation comes amid India’s reluctance to take concrete steps to stop the use of virtual currencies, despite growing concerns among lawmakers and regulators in recent years.
The Reserve Bank of India (RBI) has voiced similar concerns about cryptocurrencies traded in the market. RBI Governor Shaktikanta Das said he has relayed the bank’s concerns to the government and will be waiting on the Cabinet’s decision, which is expected anytime between now and November this year, according to the report.
While India has yet to take concrete measures up until now, other countries have made their stance on digital assets clear. In July, El Salvador became the first country to accept Bitcoin as legal tender, while China continues a crackdown on the marquee cryptocurrency in what appears to be a strategy to launch a central bank digital currency (CBDC).
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