According to local media sources, the government would not seek an outright ban on cryptocurrency in India but will instead regulate it. TheCoinRise reported on November 24 that the Indian government was preparing a measure that would create an official digital currency while banning all “private” cryptocurrencies.
The news caused panic selling on local crypto exchange WazirX the next day, and the bill’s ambiguous phrasing and lack of official clarity have left many investors confused about the future of crypto in India.
However, after the finance minister verbally confirming that the country is only looking to regulate the crypto industry winter session of parliament, Indian news channel NDTV reported yesterday that it has some exclusive details of a cabinet note circulating in the government.
It said that the note consists of suggestions to regulate the crypto under asset class with the SEBI or Securities and Exchange Board of India overseeing the local crypto exchange regulation.
Private wallet ban might follow in India
The reporter Sunil Prabhu said that investors would be given some time to record their holdings and provide them to exchanges regulated by SEBI, suggesting a private wallets ban in India might follow. He further added that the government is taking these steps just to prevent money laundering and terror financing. Before this, many regulators around the world, including the United States, said that digital assets are subject to money laundering.
Prabhu also stated that authorities would put the Reserve Bank of India’s (RBI) ambitions for a central digital bank currency (CBDC) on hold while focusing on the crypto industry. It will not recognize any crypto assets as currencies or legal tender, implying that it is attempting to draw a clear line between the two.
The NDTV report has been welcomed by many Indian investors as they do not have to worry about an outright ban. However, some were not pleased with the report saying that they would have to stick only to Indian crypto exchanges.