India To Regulate Crypto as Asset Class, Yet Uncertain About Trading
Citing direct government sources, the India Economic Times reported that India is considering a ban on the use of cryptocurrencies for payments, yet it will allow and regulate trading of crypto as an asset class.
A crypto regulation bill is expected to be presented in the parliament’s winter session. With details still being finalized, the bill seems to have moved away from an outright ban of crypto in the country as initial reports revealed.
The Indian government met with the crypto industry on Monday, part of a series of closed-doors discussions and consultations between government and the Reserve Bank of India (RBI) that were scheduled the past week.
Speaking to crypto news magazine Coindesk, Founder and CEO of think tank Policy 4.0, Tanvi Ratna, said:
“Regulating crypto as an asset doesn’t solve all the issues that authorities are concerned about, but it does take it out of the currency arena, which is one of RBI’s worries.“
“The trickiest part is defining the asset class. But other RBI concerns are more challenging to solve, such as financial stability, capital controls, and exchange rate risk.”
Economic Times’ sources also disclosed that the proposed bill will affect advertising and ban the so called “active solicitation” from crypto firms, including exchanges and platforms.
In addition, price arbitrage is another worry. Also reported in the Economic Times, Indian Authorities are concerned about how regulators can monitor multiple exchanges “when there is a huge price difference and an opportunity for a price arbitrage,” anonymous sources concealed.
The bill brings along lots of speculation. A key question is the decision of what institution would be designated as the regulator, with the Securities and Exchange Board of India being a favorite among experts.
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Author: Peter Siu