The central government of India is reviewing key parts of a legislation that would have effectively banned cryptocurrencies. The tide may have finally turned for cryptocurrencies in India as reports indicate a softer stance by the government toward crypto.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 was listed for introduction in the Budget Session of Parliament but was never introduced. The government, together with regulators and other stakeholders, is taking a relook at key aspects of the bill.
Discussions are underway on three issues:
- These include: Whether to impose a complete ban on cryptocurrency trading in India.
- Whether cryptocurrencies can be regulated by authorities, instead of a blanket prohibition.
- What kinds of activities can be permitted and what should be discouraged.
Inside sources also claim that Parliament will debate a comprehensive crypto regulatory bill during the Monsoon Session beginning in July. An expert panel created by the finance ministry is reportedly studying protocols for crypto regulation and its finding could form part of the parliamentary deliberations next month.
The government has also taken into account the central bank’s recent advisory on cryptocurrencies. While the RBI clarified that its 2018 circular is no longer valid, it asked banks to continue doing due-dilligence of cryptocurrency related businesses under “Know Your Customer” and “Anti Money Laundering” rules.
India’s Supreme Court overturned in March 2020 a 2018 RBI ban that prohibited banks from servicing cryptocurrency exchanges. As previously reported by Cointelegraph, three major crypto exchanges — Kraken, Bitfinex and KuCoin — are looking to enter the indian market.
