India’s government has drafted a detailed regulatory framework for cryptocurrency that will be made public by September, according to a Ministry of Finance senior official.
Local news reports in India say regulators have not revealed how cryptocurrencies will be regulated, but a source quoted by Quartz suggests crypto could be regulated as a commodity.
“I don’t think anyone is actually thinking of banning (cryptocurrencies) altogether,” the source states. “The issue here is about regulating the trade, and we need to know where the money is coming from.”
The unnamed source went on to explain that “allowing it as a commodity may let us better regulate trade and so that is being looked at”.
The draft is reportedly ready, and consultation is now underway with all the stakeholders, after which a final draft of the bill will be publicly revealed, according to the source. The stakeholders include the Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI), and Internet and Mobile Association of India (IAMAI).
“The ministry has constituted an interdisciplinary committee under the chairmanship of Special Secretary (Economic Affairs) to examine the regulatory framework regarding virtual currency,” the source adds. “SEBI and RBI have expressed some reservations regarding clauses in the initial draft.”
Another source told the New Indian Express that “cryptocurrency is a new phenomenon and naturally, governments across the globe are struggling with it. Most of the officials have serious reservations against it, with which all of us agree. We want to arrive at a common conclusion. There must be an appropriate mechanism to regulate the same.”
Despite cryptocurrency trading not being deemed a criminal offence, the RBI has banned all financial institutions under its jurisdiction from providing services to crypto firms. The Supreme Court of India has scheduled a hearing – in response to the RBI ban – for crypto regulatory petitions for 11th September.
Recently, the state-run Law Commission of India suggested in a report to the government that cryptocurrencies were a valid form of payment just like credit and debit cards.
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