Based on recent reports, the Indian government is considering regulating crypto assets rather than outright getting rid of them.
This is a 180-degree turn from previous reports that suggested cryptocurrencies would be prohibited.
Crypto ban might harm the economy
The government of India’s attitude on cryptocurrencies has taken on a new guise, with local media outlets reporting that the administration will opt for regulation rather than an outright ban.
NDTV said that it has acquired the contents of a cabinet memo outlining a number of regulatory steps.
Indian investors, in particular, will have a limited amount of time to report their crypto holdings. After that, they’ll have to transfer their assets from private wallets to regulated exchanges.
This means they won’t be able to use hardware wallets instead of being forced to store their funds on centralized exchanges.
The goal is to trace asset flow in order to prevent money laundering and other illegal acts. The Securities and Exchange Board of India (SEBI) will regulate the exchanges, which would almost certainly need platforms to register.
Last month, allegations surfaced that the government was considering a bill to outlaw the asset class, prompting panic selling on WazirX, a prominent local market.
Supporters of cryptocurrency have been campaigning against the harsh ban, claiming that it will harm India’s economy.
Details are unclear
India has a lengthy history of changing its mind about cryptocurrency. For years, reports have stated that it would either be regulated or banned, causing investors to be confused.
The government has established panels to examine the asset class, but the outcome has always been ambiguous.
The market would be subjected to new taxation and control procedures under the new rules. Overall, this is preferable to a ban because it allows investors to keep their investments.
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