According to Bloomberg, reports suggest that the government is negotiating with financial regulators and industry stakeholders to examine the provisions of an earlier proposal that actually called for a general ban on cryptocurrencies in India.
In February, several reports from India raised concerns about a possible ban on cryptocurrencies, which has not yet taken effect. Instead, the authorities are now considering a more subtle approach to crypt regulations.
Discussion on three fronts
An anonymous source quoted by Bloomberg said there were currently discussions accompanied by a review of the clauses set out in a previous bill banning cryptocurrencies to determine whether to proceed or to seek an alternative approach.
According to the publication, these discussions are taking place on three fronts. The first two issues allegedly concern whether the cryptocurrency can be regulated or whether the government should opt for a “hard ban”.
The third point of the program is allegedly the identification of the types of cryptoactivities that could be allowed under the standardized regulatory paradigm.
The Reserve Bank of India continues to maintain its anti-crypto stance. The RBI has previously stated that it has communicated its reservations about cryptocurrencies to the federal government.
In May, the RBI clarified that commercial banks were not subject to central bank orders to refuse crypto-exchange service. In fact, in March 2020, India’s Supreme Court overturned a previous RBI mandate banning banks from operating stock exchanges in the country.
Given the deliberate pace of ongoing discussions, the cited source also added that during the forthcoming monsoon session of parliament, which will begin in July, it is unlikely that an amended law on the regulation of cryptocurrencies will be presented.
While India is considering which direction to take, three major cryptocurrency exchanges – Kraken, Bitfinex and KuCoin – are reportedly seeking to expand their business to the country to offer services to an estimated 15 million crypto investors in the country. Digital assets are still thriving here. For example, trading volumes increased by more than 500% after March 2020.