By
Bena Ilyas
April 18th, 2024
India is likely to soften its stand on cryptocurrencies while giving them legal status but under strict regulatory measures.
It looks like the Indian regulatory authorities are likely to bring some clarity on their stand for cryptocurrencies after months of waiting. Local news publication The New India Express reported on Wednesday, December 26, that the government has set up a second interdisciplinary committee to legal digital currencies in the country, however, with more stricter rules in place.
Earlier this month, a CNBC report suggested that India is likely considering a complete ban on crypto assets. The report said that the Indian government “has categorically said that all such currencies should be treated as ‘illegal”. Well, today’s report comes just within a months time while putting forward a completely contrasting stand.
An unnamed senior official spoke with the publication saying that the newly formed committee had met twice. However, the deliberations are still ongoing at this point.
“We have already had two meetings. There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders. Deliberations are on. We will have more clarity soon.”
India’s Uncertain Stand on Cryptocurrencies Since The Last Year
Over 18 months back in March 2017, India formed its first interdisciplinary committee on cryptocurrencies. Last year, the Indian Indian Finance Minister Arun Jaitley refused to recognize cryptocurrencies as “legal tender”. He further added that the government will introduce the necessary steps to curb the use of crypto assets in “financing illegitimate activities”.
Earlier this year in April, India’s central bank RBI asked all banking institutions to cut ties with crypto exchanges. This was the government’s major attempt to reduce the liquidity flow from fiat to crypto assets. It also gave a major blow to the business of Indian exchanges.
However, to look over the working of the first committee, a second committee came into existence. Subhash Chandra Garg, the Secretary of the Department of Economic Affairs, was leading the second committee. He was responsible to look for the viability of digital currencies in the Indian economy.
Earlier this month, during the G20 summit in Buenos Aires, Argentine, the members discussed major aspects of cryptocurrency taxation and regulations while combatting the issues related to money-laundering.
According to the unnamed source, the newly formed committee will conduct a meeting in January 2019. Herein they will be discussing important issues surfaced during the summit. Later on, the members will unanimously present their stand to the government.
“We have also taken inputs from cryptocurrency exchanges and experts and will be examining legal issues with the law ministry. It’s a complicated issue. Once all aspects are decided, then we will have more clarity,” the senior official explained.
It looks like the government could likely considering a soft stand rather than introducing an outright ban. Simultaneously, it is much likely to focus on tough regulatory measures that can protect the investors’ interests.