India does not want cryptocurrencies as a payment, but considers them as assets

The Indian government plans to present a cryptocurrency regulation bill in the winter session of parliament, the details of which are being finalized. The bill appears to have changed course from previous plans to ban cryptocurrencies in the country. In the bill, authorities will also ban "active solicitation" by crypto companies, including exchanges and platforms. The government held a meeting with crypto industry representatives on Monday, adding to a series of closed-door discussions between the government and the Reserve Bank of India (RBI) that have taken place in recent days. "Regulating cryptography as an asset does not solve all the problems that authorities are concerned about, but takes it out of the currency arena, which is one of the concerns of the RBI," explained Tanvi Ratna, founder and CEO of Think Tank Policy 4.0.

"The tricky part is defining the asset class," he said, adding that the current discussions to regulate crypto as a commodity are not a good idea. But other RBI concerns are more difficult to resolve, such as financial stability, capital controls and foreign exchange risk, Ratna noted. Price arbitrage has emerged as a new concern, ET also reported on Tuesday, citing unnamed sources. Authorities are concerned about how any regulator could keep an eye on multiple trades "when there is a huge price difference and an opportunity for price arbitrage," according to one of the sources. Exchanges are pushing for a regulatory sandbox to fine-tune regulations, according to the report. The Securities and Exchange Board of India may be designated as the regulator, but no "final call" has been made on this issue, the report added.

by Alessandro Crea Thursday 18 November 2021 17:00