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The Indian government is readying to regulate crypto as assets instead of enforcing an outright ban on the industry. A report unveiled this news earlier today, citing a Cabinet note. By regulating cryptos as assets, India has declined to recognize coins like Bitcoin (BTC/USD) and Ethereum (ETH/USD) as currencies.
According to the report, the Securities and Exchange Board of India (SEBI) will oversee crypto regulation. The publication added that the regulator would prescribe a cut-off date that mandates crypto HODLers to declare their holdings and move them to Indian crypto exchanges. Reportedly, the new regulations will not allow Indians to hold crypto on foreign exchanges.
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Violating these provisions will see crypto adopters in the country face penalties such as imprisonment for up to 18 months. Additionally, SEBI might impose monetary penalties ranging from $443,852.64 (£334,231.42) to $1,775,410.56 (£1,336,925.70).
Moreover, the Indian government seeks to make suitable amendments to the Prevention of Money Laundering Acts (PMLA) to cover the crypto space. In so doing, the government aims to curb crypto-related illicit activities like terrorist financing.
These plans are congruent with Finance Minister Nirmala Sitharaman’s statement earlier this week when she noted the government is monitoring the risk of cryptocurrencies going to the wrong hands. Before this, Prime Minister Narendra Modi touched on the same matter, saying democratic nations need to work together to ensure crypto does not end up in the wrong hands.
Take crypto-currency or bitcoin for example.
— PMO India (@PMOIndia) November 18, 2021
It is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth: PM @narendramodi
RBI to press pause on its CBDC plans
Reportedly, the government intends to keep its plans to launch a central bank digital currency (CBDC) on hold as it focuses on the crypto space. The proposed CBDC by the Reserve Bank of India (RBI) will not fall under SEBI’s regulatory scope because it will be the digital version of the rupee. However, the RBI will oversee crypto-related matters.
The Indian crypto community received this news well. An example is a Redditor going by ultron290196 who heaved a sigh of relief, saying it was a hassle to worry about the bear market in the crypto market and the possibility of an outright ban.
Meanwhile, the crypto space continues trying to recover from its losses over the past week. At the time of writing, BTC is up 0.65% in the day to change hands at $57,082.28 (£42,983.24). The altcoin market is also green, with most of the coins in the top-10 list of leading cryptos gaining between 0.19% to 6.78%.