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The Indian government has gone from making noises about a complete ban on cryptocurrencies, to now thinking about allowing crypto assets to be held, but not to be used to transact with, or to be used to make payments.
According to the English Edition of the India-based ‘Economic Times’, legislation is currently being worked on that seeks to regulate cryptocurrencies in the country.
The proposed regulations would allow Indian citizens to hold crypto assets, just like gold or bonds are held, but would not permit citizens to transact in them or to use them as payments.
Under the proposed legislation, cryptocurrency exchanges and other crypto related platforms would not be allowed to solicit custom, as stated by a government source:
"Active solicitation would not be permitted... Details of the bill are being finalised,"
It is thought that the legislation could be ready and set before the Indian cabinet in the next 3 weeks, with the Securities and Exchange Board of India (SEBI) possibly in line to be the “designated regulator”. Taxation is another area being considered in this draft regulation.
According to the Economic Times article, the Indian government was said to be:
“likely to take the middle path on cryptocurrencies and not opt for an outright ban.”
However, not allowing cryptocurrencies to be transacted in any way does appear to make the government lean very much towards stifling the growth of crypto investment and development in India, and many will be disappointed with this legislation if it should pass as is.
Given that the government has said regarding cryptocurrencies, that the way forward is to be “progressive and forward-looking”, it doesn’t seem that what it proposes goes anywhere near far enough towards encouraging an “evolving technology”.
The Reserve Bank of India (RBI) will undoubtedly weigh heavily on the anti-crypto side of the government, given the many concerns it raises over “threats to macroeconomic and financial stability”.
The governor of the bank, Shaktikanta Das is known to be in favour of a ban on cryptocurrencies, and has said that there needed to be a far deeper discussion on crypto assets and on the issues that he and his bank had brought up concerning them.
