Based on reports published by local media platforms on December 2, reliable sources confirmed that the Indian government has successfully reached a consensus to regulate private cryptocurrencies instead of imposing a total ban in the country.
For several years, the Indian government has been somewhat ambivalent about crypto. Reports emerged that the Indian government was even considering a bill proposing the creation of an official digital currency while consequently banning all private digital assets on November 23.
The news sparked panic within the crypto community and local crypto exchanges such as WazirX a few hours later. The vague wording of “private crypto” and lack of clarification from the government has since then left many onlookers divided on prospects for crypto in India.
But surprisingly, on December 2, the Indian local news outlet NDTV aired the news about the new fate of crypto in the Asian nation. The news outlet confirmed to have obtained details of cabinet notes circulating within the government offices although not publicly gazetted.
According to Sunil Prabhu, a reporter at NDTV, the note contained suggestions to regulate cryptocurrencies as digital assets, with the Security and Exchange Board of India (SEBI) that oversees the regulations of local crypto exchanges.
The new note also provides investors with a time frame to declare their crypto holdings and transfer them to SEBI-accredited crypto exchanges, which suggests that private wallets may be prohibited. According to Prabhu, this is part of a government push to prevent money laundering and terrorism financing.
Prabhu also revealed that the government confirmed to hold the initial plan to establish its central bank digital currency (CBDC) with the Reserve Bank of Indian (RBI). However, the government vowed not to embrace any crypto asset as a recognized currency or legal tender, suggesting that it aims to provide the difference between the two in the future:
“[Cryptocurrency] as a legal tender will not be accepted. That is a clear no. I think that that is what even the prime minister in his deliberations at that meeting made absolutely clear to ensure that does not take place.”
“I think they will do it [CBDC] as a standalone virtual currency for the RBI at a later stage, so you can definitely expect a virtual currency soon, but it will take place at a different time.”
The breaking news from the NDTV has been welcomed warmly by some Indian crypto investors online. While expressing his gratitude on Reddit, the user “ultron290196” wrote:
“It seems our Indian crypto movement is getting noticed by the government, and they’re finally deciding to regulate Cryptocurrency as Crypto “Assets” and not recognized as legal tender. […] All in all, it’s a sigh of relief for us Indian folks. I’d rather pay some tax than become an outcast.”
Nonetheless, not everyone was pleased with the details, with user No-Incident-8718 expressing his dismay, writing:
“Here’s the catch. No use of hard wallets only exchanges wallets. Also, only using Indian exchanges.”