A new document seen by local media outlets suggests that India is looking to regulate, not suspend crypto.
The change of direction explains why there have been companies willing to continue to set up shop, despite the uncertain outlook.
Previously, we reported that the country had introduced a bill that would effectively have rendered any “privately held” cryptocurrency unusable.
That is the majority cryptocurrencies, since only a few governments around the world own crypto, and they refer to them as central bank digital currencies (CBDCs).
India is also pushing for a CBDC of its own, but it seems it would now have to do so in a slightly more competitive context.
According to a report by NDTV’s Sunil Prabhu, the document circulating the government hallways suggests regulating cryptocurrencies as crypto assets.
The responsibility for regulating the assets will fall on the Securities and Exchange Board of India (SEBI).
If Prabhu’s report is correct, investors will be given a grace period during which they can declare their crypto holdings so that they are on the same side with the law.
However, the government will use the opportunity to regulate crypto to also introduce plans for its own CBDC which will be outsourced to the central bank to develop.
The Reserve Bank of India is a known opponent of cryptocurrencies in general, but it has a soft spot for CBDCs.