By Shelly Melancon (Switzerland)
India is considering making a U-turn on its initial cryptocurrency stance with officials looking at pushing for a bill in favor of crypto regulations at the Monsoon Session of the Parliament. The Reserve Bank of India (RBI) had initially stopped banks from dealing with cryptocurrency exchanges Bitcoin in 2018 until its decision was overturned by the Supreme Court in March 2020. With this latest move, it may indicate the goodwill of the Indian government towards cryptocurrencies. A Thursday report on New Indian Express indicates that the government may be embracing digital assets and brainstorming on viable policies with respect to the sector.
According to undisclosed sources quoted by New Indian Express, the Indian government is no longer moving towards an outright ban and is looking forward to categorizing cryptocurrencies as an alternative asset class. India’s U-turn on cryptocurrency may be against the backdrop of El Salvador’s latest adoption of Bitcoin as a legal tender, which makes it the first sovereign nation to adopt Bitcoin as a legal tender. El Salvador’s decision was met with positive reactions and this has prompted other Latin American countries like Paraguay and Mexico who are also looking to embrace the Bitcoin technology and make it a store of value. El Salvador’s President, Nayib Bukele had said the adoption of Bitcoin as a legal tender would change the lives of millions of El Salvadorans including low-income families. He had further said that consumer goods would have their price updated in Bitcoin as well as the US dollar.
Also read:India’s SEC to Manage Crypto Regulations
The RBI had been forced to clear its position on crypto transactions last month following the circular major banks in the country had issued to their customers citing the principal bank’s circular released in 2018. The RBI had issued a statement some days later where they made reference to the decision of the Supreme Court of India overturning the RBI’s directive that prevented banks from facilitating crypto transactions. It had seemed that authorities were not willing to change their indifferent stance. The Securities and Exchange Board will, according to reports, be saddled with responsibility of managing the regulations on crypto in conjunction with the Ministry of Finance. Despite this, the position of the RBI still remains the same.
The publication claimed that the Parliament will deliberate on the bill during the Monsoon session in July to fashion out a viable plan on the regulations. Moreover, the Ministry of Finance has set up a professional team that is researching on modalities for the regulations and their research results may be considered during the Parliament’s session in July. Meanwhile, in May, a group of technocrats had encouraged the Indian government to not categorize cryptos as currencies but as digital assets. Based on this, other crypto exchanges may be looking at penetrating the Indian market as Bitfinex, KuCoin and Kraken had stated plans to extend its services to Indians.
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