The Indian government may take a more nuanced approach to digital currency as they consider cryptocurrencies to be property but does not allow them to be used for payments or advertising
India Classifies Cryptos as property, Not for Payment or Advertising
According to The Economic Times, which cited anonymous sources close to Prime Minister Narendra Modi’s cabinet, the government would allow citizens to own cryptocurrencies as assets under the bill.
According to the report, it will also restrict organizations like exchanges and cryptocurrency platforms from using advertising to deliberately acquire new consumers.
The law might be presented to the cabinet for consideration within the next two to three weeks, according to the article.
With these plans in mind, big Indian cryptocurrency exchanges such as WazirX and Bitbns are claimed to have resolved not to advertise their services even if binding legislation is enacted.
The problem with advertising has prompted a “big debate,” according to Tanvi Ratna, founder, and CEO of the Policy 4.0 research tank.
ET also reported that the crypto exchanges WazirX and Bitbins have suspended their adverts. WazirX halted advertising in August, according to a spokeswoman for the exchange, and ET’s title was deceptive, while CoinDCX declined to comment on the report.
According to a source familiar with the deliberations at the Modi-led meeting on Saturday, the cabinet’s overall position is that the steps to be done in relation to blockchain technology must be “progressive and forward-looking.”
India sees cryptocurrency as an asset that won’t address all of the country’s cryptocurrency issues.
The Reserve Bank of India (RBI), the country’s central bank, had previously linked the government’s restrictive position on cryptocurrencies to its conservative policies.
On Monday, the administration convened a closed-door meeting with leaders from the cryptocurrency business, following a series of closed-door negotiations between the government and the Reserve Bank of India (RBI) in recent days.
“Regulating cryptocurrency as an asset doesn’t solve all of the issues that the authorities are concerned about,” Ratna adds, “but it does take them out of the monetary sphere, which is one of the RBI’s concerns.”
“Determining the asset class is the most difficult element,” she said, noting that current conversations about regulating cryptocurrencies as a commodity are going poorly. Financial stability, capital controls, and exchange rate risks, on the other hand, are more difficult to overcome, according to Ratna.
According to ET, which cited anonymous sources, arbitrage has become a new cause of concern. According to one of the sources, authorities are concerned about how a regulator would monitor numerous exchanges “when there is a significant arbitrage and a chance to arbitrage.”
Exchanges are asking for a regulatory sandbox to help refine regulations, according to the article. According to the article, the Securities and Exchange Board of India may be appointed as a regulator, but no “final decision” has been made.
Meanwhile, the Indian legislature is working to regulate cryptocurrencies. Representatives from major exchanges, the Blockchain and Cryptocurrency Asset Council (BACC), and other industry insiders met with Parliament’s Standing Finance Committee for the first time on November 15.
Local observers anticipate Indian legislators commenting on the much-anticipated crypto bill during the upcoming winter legislature session, which begins in November.
