India not to ban, but ‘regulate crypto’: Cabinet documents
According to news reports from local media, the Indian government is not in the mood for an outright crypto ban, but is planning on regulating the sector.
On November 23, there were reports on local media that the Indian government had been considering a bill proposing to create an official digital currency while imposing a ban on all “private” cryptocurrencies.
The news had led to massive panic selling on the local crypto exchange WazirX the following day, while the vague wording on the bill coupled with lack of clarification from the government had left many people divided on the prospects for cryptocurrencies in India.
However, Indian news outlet NDTV had reported on December 2 that it had obtained details of a cabinet note that had been circulating in the government regarding the proposed cryptocurrency bill.
News reporter Sunil Prabhu from NDTV has said that the note obtained from the government had contained suggestions for the regulation of cryptocurrencies as crypto assets, under the supervisory role of the Securities and Exchange Board of India (SEBI), that would regulate local crypto exchanges.
According to Prabhu, investors would be given a certain timeline wherein they would be expected to declare their crypto holdings as well as transfer them to exchanges that are regulated by SEBI. This suggests that private wallets might be banned.
He has also added that this is actually a push from the government for the prevention of money laundering and terrorism financing.
Prabhu has also said that the government would put forward its plans for a central digital bank currency (CBDC) in partnership with the Reserve Bank of India (RBI) on hold while it is focused on the crypto sector. It wouldn’t allow any crypto assets to be recognized among legal tenders, a suggestion that aims at providing a clear distinction between the two.
Prabhu also stated that the government might introduce a CBDC as “a standalone virtual currency for the RBI”, but that would be later, so people can “definitely” expect a virtual currency in place soon but in the near future from now.
NDTV’s government notes have been welcomed by some Indian investors. Redditor “ultron290196” had readily posted in the r/cryptocurrency subreddit expressing their relief at no longer having to worry about an outright crypto ban in India. The user said that the Indian crypto movement “is getting noticed by the government,” which is why they are deciding to regulate Cryptocurrency as Crypto “Assets” and not as legal tender.
The user said that it is actually “a sigh of relief” Indian crypto traders and investors and that they would “rather pay some tax than become an outcast.”