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India may prohibit cryptocurrency transactions while allowing its possession as a form of assets. On November 17, Mumbai, According to the Economic Times, India is likely to prohibit the use of cryptocurrencies for transactions or payments, but would allow them to be retained as assets like gold, stocks, or bonds.
Prohibiting Cryptocurrency Transactions While Allowing its Possession as a Form of Assets
According to the news platform, this strategy would avoid enacting a total ban, while the government was determined to restrict crypto firms, like exchanges and platforms, from actively seeking to recruit new investors, citing people familiar with the government's thinking.
To achieve recognition and avoid a ban, the crypto community has repeatedly requested that it be classed as an asset rather than a currency by Indian authorities. According to insiders, India's Prime Minister Narendra Modi attended a meeting last week to examine the future of cryptocurrencies amid worries that unregulated crypto marketplaces might be used for money laundering and terror funding.
According to the journal, a person acquainted with the conference talks claimed that the government's general attitude is that efforts should be proactive, "progressive, and forward-thinking" because cryptocurrencies are still a growing technology. The contents of the law are still being finalized, according to the publication, and the cabinet might receive the proposed legislation in the next two to three weeks for consideration.
Digital Currency Market in India
According to the journal, the Securities and Exchange Board of India (Sebi) may be designated as the regulator, though nothing has been finalized yet. So far, the Reserve Bank of India has been wary about cryptocurrencies, citing concerns about macroeconomic and financial stability, as well as capital controls.
India's digital currency market was valued at $6.6 billion in May 2021, up from $923 million in April 2020, according to Chainalysis, a blockchain analytics firm. At a Tuesday event, RBI Governor Shaktikanta Das emphasized the central bank's concerns, saying that more dialogue was required and that there was a lack of well-informed public conversation.