The Indian government plans to regulate cryptocurrencies as ‘assets,’ rather than outright ban them. The Securities and Exchange Board of India (SEBI), the country’s market regulator, would be in charge, according to a cabinet note viewed by NDTV.
This corroborates Finance Minister Nirmala Sitharaman’s earlier assertion that Bitcoin is not recognised as a payment currency in India. In contrast, India is establishing its own central bank digital currency (CBDC), which would be controlled and overseen by the Reserve Bank of India (RBI).
According to the document, citizens will be compelled to declare their crypto holdings and keep them on Indian exchanges. They will no longer be permitted to keep cryptocurrencies on international exchanges or in personal wallets.
People will have a specific length of time once the bill is passed into law to transfer their assets to meet these requirements. Fines ranging from $5 million to $20 million could be imposed if this is not done.
India also plans to amend the Prevention of Money Laundering Act (PMLA) to include cryptocurrency-related provisions. According to Sitharaman, the government is closely monitoring the risks posed by cryptocurrencies. Prime Minister Narendra Modi, emphasising the volatile nature of digital tokens, urged for global collaboration from democratic nations to regulate the sector and protect the youth in November.
“The sector has been actively engaging with all stakeholders while maintaining investor protection at the forefront,” said Ashish Singhal, co-chair of the Blockchain and Crypto Assets Council and founder of CoinDCX (BACC).
How far has India’s cryptocurrency bill progressed?
The proposed laws to control cryptocurrencies and other aspects of the crypto sector, such as decentralised autonomous organisations (DAOs), non-fungible tokens (NFTs), and the metaverse, are now being debated in India’s lower house, the Lok Sabha.
According to Sitharaman, the law is pending Cabinet clearance before being presented to Members of Parliament (MPs).
“Investors — family offices, traditional VC businesses — would pour more money into India if something nice comes out,” WazirX’s head of public policy, governance issues, and content, Aritra Sarkhel, told Business Insider during a sponsored webinar.