By now, investors are finding cryptocurrencies as a beneficial opportunity, but it is quite a risky and uncertain market if not regulated with clarity. One such problem is existing in India as far as concerned to cryptocurrency, as the stance of authorities is not clear yet.
However, the Indian government has given an update regarding the development in the country’s regulatory framework for cryptocurrencies. The government stated that it is considering licensing of crypto businesses and regulations “with due caution.”
The Indian Ministry of Finance was asked some questions by Lok Sabha, the lower house of India’s parliament regarding cryptocurrency. On which, Pon Radhakrishnan, the Minister of State in the Ministry of Finance and Ministry of Shipping answered stating, “In the absence of a globally acceptable solution and the need to devise a technically feasible solution, the department is pursuing the matter with due caution.”
When asked about “the timeline for the expected release of the regulation,” he said that it is difficult to state a specific timeline to come up with clear recommendations. He also explained that the government has formed an inter-ministerial committee “under the chairmanship of Secretary, Department of Economic Affairs, with representatives from concerned departments to study all aspects of cryptocurrencies and crypto-assets including bitcoin.”
Regarding the legality of digital assets, the minister noted that the government has not considered cryptocurrencies as legal tender. And the trading in cryptocurrencies is currently under examination. The minister elaborated, “No decision on licensing and authorizing any entity or company to operate such schemes or deal with bitcoins or any virtual currency has been made as yet.
At present, in India, the ban is imposed over banks servicing cryptocurrency-related operations. Due to the ban, several local businesses took the exit from the country. This has also caused consumer backlash which resulted in a Supreme Court challenge. Although, the central bank and the government seemed unaffected by the backlash. This shows that the lack of regulations has kept the investors away from the crypto domain in India. Somehow, crypto with regulations would help the economy on a large level considering massive user base of the country.