Authorities in India are likely to choose against a sweeping cryptocurrency ban and treat them as commodities, a report citing a government official has claimed.
Citing a senior government official involved in the ongoing regulatory discussion surrounding cryptocurrencies, Quartz is reporting that India is unlikely to enforce a blanket ban on cryptocurrencies despite the newly-enforced central bank mandate that prohibits banks from providing services to the burgeoning sector.
As reported previously, the Reserve Bank of India (RBI) issued a circular in April to bar all regulated financial institutions in the country from allowing their customers to purchase cryptocurrencies through their bank accounts and stopping services to cryptocurrency businesses altogether. The central bank’s policy, which went into effect on July 5th, came despite the establishment of an inter-governmental committee comprising of multiple government ministries and domestic banks tasked to propose a regulatory framework for the sector in 2017.
Contrary to the usual regional media narrative, the official has revealed that the notion of a blanket crypto ban hasn’t been considered. “I don’t think anyone is really thinking of banning it (cryptocurrencies) altogether,” the senior government official with knowledge of the panel’s discussions told Quartz.
Instead, the panel’s concerns are more inclined with regulating cryptocurrency trading to keep a track of the money trail.
Drawing a direct parallel to traditional trading markets, the official stated:
“Trade is not a criminal offence. Most of us trade in various asset classes in the stock market. So how is this [cryptocurrency trading] any different? What has to be in place is a mechanism to be sure that the money used is not illegal money, and to track its source is the most important thing.”
Last month, the head of the same government panel and secretary of the department of economic affairs confirmed the panel had made headway in drafting a regulatory framework and is currently in an advanced stage with guidelines expected to be published in July.
“Allowing it as (a) commodity may let us better regulate trade and so that is being looked at,” the anonymous official confirmed on Wednesday’s report, soothing fears among domestic cryptocurrency adopters and the wider industry.