MUMBAI – India is likely to bar the use of cryptocurrencies for transactions or making payments, but allow them to be held as assets like gold, shares or bonds, the Economic Times reported on Wednesday.
Citing sources familiar with the government’s thinking, the newspaper said this approach would avoid implementing a complete ban, though the government was keen to stop crypto companies, including exchanges and platforms from actively trying to attract new investors.
The crypto community has made several representations to Indian authorities asking to be classified as an asset rather than as a currency, in order to gain acceptance and avoid a ban.
India’s Prime Minister Narendra Modi last week chaired a meeting to discuss the future of cryptocurrencies amid concerns that unregulated crypto markets could become avenues for money laundering and terror financing, sources had said on Saturday.
A person aware of discussions at that meeting said that the overall view within government is that steps taken should be proactive, “progressive and forward-looking” as cryptocurrencies represented an evolving technology, the newspaper reported.
Sources told the newspaper that details of a bill were still being finalised, and the cabinet could receive the proposed legislation in the next two to three weeks for its consideration.
The Securities and Exchange Board of India (Sebi) could be designated as the regulator, though that has not been finalised, the newspaper reported.
The Reserve Bank of India has so far appeared very reluctant to accept cryptocurrencies, expressing concerns over potential risks to macroeconomic and financial stability, and capital controls.
India’s digital currency market was worth $6.6 billion in May 2021, compared with $923 million in April 2020, according to blockchain data platform Chainalysis.
RBI Governor Shaktikanta Das reiterated the central bank’s concerns at an event on Tuesday, saying there was a need for deeper discussions, and noting the lack of a well-informed debate in the public domain.