Indian government to regulate, not ban crypto

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A CNN subsidiary in India confirmed that the government is not seeking a total crypto ban with its new bill, but rather mechanisms to regulate the asset class as a commodity The government is particularly concerned about the role potential of crypto in the financing of terrorism

Blockworks reported on the language on Wednesday in a recent bill to the Indian parliament that mentioned a ban on all “private cryptocurrency.” Local media across the country have now confirmed to their government sources that the government’s intention is something different.

According to a local CNN affiliate in the country, the government intends to regulate crypto and is primarily concerned with its use in the underground economy and terrorist financing. A wholesale ban is not in progress.

To do this, the government intends not to recognize crypto as an offering and to put in place a full KYC / AML mechanism at the various fiat gateways in the country.

“A strict mechanism will be in place for law enforcement to trace the origin of cryptocurrency used for illegal or anti-national purposes,” CNN sources said.

Speaking to CNBC’s Squawk Box Asia, Avinash Shekhar, co-CEO of Zebpay, an exchange, said their initial talks with the government had had “positive vibes.”

“There have been a lot of positive waves from the government. We met with Parliament’s finance committee about two weeks ago, ”he told CNBC.

“The message or the impressions we get from the government is that they are looking for some kind of regulation – strict regulation, but not a complete ban.”

Either way, local traders in India have embarked on a massive panic sale, believing the ban would be more extensive than originally advertised.

On WazirX, an Indian exchange, bitcoin was trading at a 15% discount at some point before recovering.

Source: WazirX

Since then, panic sales have eased and prices have stabilized.

A Bloomberg report also said the government is not planning a blanket ban, but may consider limiting the accessibility of exchanges to accredited investors.

Globally, the price of bitcoin has held steady at $ 57,984, down 2.4% in the past 24 hours according to CoinGecko.

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Sam reynolds

Blockworks

Journalist

Sam Reynolds is a Taipei-based journalist covering digital assets and regulation across Asia. Prior to joining Blockworks, he was an editor at Forkast News and an analyst at IDC.

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