The central government and finance ministry may soon convene a panel of experts to deliberate the possibility of regulating cryptocurrencies. An earlier committee formed in 2019 recommended and called for a complete ban on all digital assets. Authorities have now come to realize that the previous recommendation is out of date. There is also some sources saying that the panel may explore ways to operationalize the digital rupee by the Reserve Bank of India.
The idea for the finance ministry is to have a calibrated approach to regulation of cryptocurrencies. The Digital Currency Bill of 2021 was expected to be tabled in the parliament in March but for reasons unknown, it was not tabled.
The bill was said to criminalize trading and holding of any cryptocurrency assets which may be a huge blow to the nascent and established investors in the country. However now the ministry is looking at a more calibrated approach and more news about it will be made public soon.
We also need to remember that India’s central bank and regulatory body, Reserve Bank of India had banned all banks from allowing customers to trade in cryptocurrencies. This ban was later overturned by the Supreme Court following a petition filed by crypto based entrepreneurs in the country. This petition was backed by IAMAI, Internet and Mobile Association of India.
Due to pressure from RBI, banks have been moving away from crypto businesses. Currently, with the ministry being open to the idea of regulation, it is great news for the growing crypto market in India.