Crypto Won’t Be Suitable For Payments, Could Be Treated Like Gold: Last 10 Points

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India has had a hot and cold relationship with digital currencies over the past few years.

As the brainstorming continues on the regulation of cryptocurrencies, there are aspects that could be debated at length before digital coins are declared legal tender in the country. For example, there have been long discussions about whether crypto should be treated as virtual currency or as a commodity, or as an asset. Prime Minister Narendra Modi last week chaired a meeting to discuss the future of cryptocurrencies, fearing that unregulated crypto markets could become avenues for money laundering and terrorist financing. Here are the 10 facts about how cryptocurrencies could be treated in India:

The Center can ban the use of cryptocurrencies for transactions or payments, but allows their holding as assets such as gold, stocks or bonds, the Economic Times reported on Wednesday.

The report, citing sources, said the approach would avoid implementing a full ban because the government was keen to prevent crypto companies, including exchanges and platforms, from actively trying to attract new ones. investors.

The Securities and Exchange Board of India (SEBI) could be appointed as the regulator, although this has not been finalized, the report added.

The crypto community has made several representations to Indian authorities asking to be classified as an asset rather than a currency, to gain acceptance and avoid a ban.

India and Crypto: India has had a hot and cold relationship with digital currencies over the past few years. In 2018, it effectively banned crypto transactions, but the Supreme Court overturned the restriction in March 2020.

RBI’s Take on Crypto: The Reserve Bank of India (RBI) has so far seemed very reluctant to accept cryptocurrencies, expressing concerns about potential risks to macroeconomic and financial stability and controls capital. RBI Governor Shaktikanta Das said India needs much more in-depth discussions on the issue of cryptocurrencies. “When the central bank says we have serious concerns from a macroeconomic and financial stability perspective, there are much deeper issues at play. I have yet to see serious and informed discussions in the public space on these issues, ”Das said.

However, the Reserve Bank is working on a digital currency. The government can present a crypto bill for cabinet approval. The new bill could be introduced during the winter session of Parliament which begins on November 29.

India’s digital currency market was worth $ 6.6 billion in May 2021, up from $ 923 million in April 2020, according to blockchain data platform Chainalysis.

“Impose strict rules on cryptocurrencies”: Calls have been made in India to impose stricter rules for transactions in virtual coins, as an unregulated environment can push domestic savings further into the asset class and could endanger household savings.

Reserve Bank and market regulator SEBI have also raised concerns about the unregulated growth of cryptocurrencies in India, keeping vulnerable retail investors in mind.

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