In Brief:
- The Indian government seems to “just regulate cryptos.”
- It is also suggested by a Cabinet report, that the government will neither legalize crypto as a tender nor ban them altogether.
- Cryptocurrency will be recognized as Crypto-assets and will be regulated under SEBI.
With an eye to ending speculations on cryptos, the Indian Government has decided to regulate crypto and not ban it, as revealed by sources.
As per a Cabinet note accessed by a local news portal, although the government is in no mood to legalize crypto as a tender, it is neither going the China-way by clamping down on crypto activities.
Describing the cryptocurrency as “Crypto-asset”, the Cabinet apparently does not recognize cryptos as legal tender as of yet.
The note suggests that Securities and Exchange Board of India (SEBI) will regulate the current crypto exchange platforms and Crypto-assets too, which will be dealt with these platforms.
Also, a cut-off date will be pronounced for those having Crypto-assets to declare and bring under the crypto exchange platforms- which will in turn, be regulated by the market regulator.
As for India’s Central Bank Digital Currency (CBDC), RBI has put the proposal of introducing virtual currency on hold as of now. But this also implies that India’s CBDC can be expected at a later stage.
Nevertheless, RBI would certainly not refrain from regulating cryptocurrencies.
Moreover, the note also suggests that in case of violations of exchange provisions, violators might have to face a criminal imprisonment of up to one and a half years. The regulator might also levy penalties in the range of Rs 5 crore to Rs 20 crore.
In order to counteract terror related activities and money laundering, the Prevention of Money Laundering Act (PMLA) will be applied with suitable amendments.
India has still not made up its mind on the legalization of cryptocurrency. Nevertheless, there have been all kinds of “ayes” and “noes” from crypto investors when predicting the future of the crypto space.
Last week, it was reported that The Indian Government has listed the cryptocurrency bill for the winter session to ban all private cryptocurrencies. If the current development turns out to be true, it would definitely be a sigh of relief for investors!
