According to media reports, the Indian government is ready to reconsider its attitude towards cryptocurrencies and plans to form a new task force to develop industry regulation in the country.
The Indian authorities believe that the recommendations for regulating digital assets, which were proposed in 2019 by a committee chaired by former Secretary of the Indian Ministry of Finance for Economic Affairs Subhash Garg, are already out of date.
According to a knowledgeable official, the government is ready to take a fresh look at the use of cryptocurrencies, rather than ban them entirely. Therefore, the tasks of the new committee will include studying the possibilities of the blockchain and developing a separate regulation of cryptoassets.
The committee will also liaise with the Reserve Bank of India (RBI) on issues related to the development, testing and implementation of the digital rupee. However, these discussions are only at an early stage – a formal decision on the creation of the committee has not yet been made.
The media reports that due to the growing volume of digital asset trading, the Indian Ministry of Finance is ready to “compromise” and discuss with stakeholders the regulation of cryptocurrencies, as well as their potential risks.
Indian Finance and Corporate Affairs Minister Anurag Thakur, who may be a member of the working group on developing industry regulation, has already held similar discussions with participants in the cryptocurrency and banking industry.
Indian Finance Minister Nirmala Sitharaman also noted an increase in retail traders’ demand for cryptocurrencies, so he believes that digital assets need to be “well-informed” and not rushed to ban.
A bill to ban digital currencies in India was due to be considered back in March. However, its consideration was postponed for unknown reasons. Before the ban on cryptocurrencies, Indian lawmakers also planned to introduce double taxation on them.
As a reminder, in 2018, the Reserve Bank of India (RBI) banned banks from processing any cryptocurrency transactions made by individuals and legal entities. Last year, India’s Supreme Court overturned the RBI directive following a petition filed by Indian cryptocurrency entrepreneurs and the Internet and Mobile Association of India (IAMAI).
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