Government has dropped the idea of banning cryptocurrencies including Bitcoin. Instead, it is working on a bill to regulate them.
Bitcoin is one of the most popular cryptocurrencies right now.
- Government may not ban cryptocurrency in India.
- It is working on a new bill for crypto.
- The new crypto bill may bring regulations.
The Indian government was really close to imposing a blanket ban on cryptocurrencies last year. A bill was proposed in the same regard ahead of this year’s Union Budget. However, things have dramatically changed over the past 12 months and it seems like the finance ministry has given up on the idea of banning cryptocurrencies. According to a report by Economic Times, the government is now considering making cryptocurrencies a digital asset and introducing regulations to safeguard investors.
Cryptocurrencies remain legal in India but are not regulated. This makes investors vulnerable to scams and fraud. The crypto industry has been seeking better inclusion, with few voices even asking the government to make crypto a legal tender. While that may be a far-fetched reality, the report suggests that the government is looking to find a middle path which ‘balances the concerns of all stakeholders’.
The government believes that Indian investors have put large volumes of investments in cryptocurrencies to outrightly ban them. For example, Bitcoin and Ethereum have become highly popular in the country, while youngsters have also shown great interest in alt-coins like Shiba Inu and Dogecoin.
The government is now planning to draft a Crypto Bill which would execute effectively, in parallel with the technological developments in the digital space. The report says that a detailed discussion was done and a presentation was presented before the policymakers. This included all the pros and cons of cryptocurrencies. It also stated the regulatory models used by other countries and the volume of investments made by Indian traders in such digital currencies.
If the bill is tabled and eventually passed in the Parliament, it will classify Bitcoin and other cryptocurrencies as digital assets and not a legal tender. This means that while you will still be able to invest in crypto and hold it for long periods, these digital coins won’t be a substitute for the Indian rupee.
The important regulations could be around who can create and sell cryptocurrencies in India. As of now, anyone with a working smartphone or laptop and internet connection can create a new cryptocurrency and start selling it. This leaves a lot of scope for scams. The bill could also include measures to protect investors against any wrongdoing. It is likely to be tabled during next year’s Union Budget.
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