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India is forming a new committee to investigate the possibility of regulating cryptocurrencies as digital assets.
The committee will also be responsible for exploring blockchain technology, finding use cases of innovation for technological advancements.
In recent months, Indian officials repeatedly reassured the public that they would not change their minds on crypto.
A recent report by The Economic Times indicates that the Indian government is reconsidering its stance on cryptocurrencies. The government is now apparently studying the possibility of regulating cryptocurrencies, as well as exploring blockchain technology for potential use cases.
According to the report, India will form a new expert panel with the purpose of exploring use cases of blockchain technology for technological advancements along with investigating methods to regulate cryptocurrencies as digital assets instead of currency, Economic Times cites three sources privy of the discussions.
The previous committee responsible for such affairs was formed in 2019 and was led by the former Indian finance secretary Subhash Garg. The committee, after doing its research, suggested a blanket ban of crypto. However, now, some believe that the findings by the former committee are “outdated” and new research is required.
“There is a view within the government that the recommendations made by the Subhash Garg [committee] are dated and a fresh look is needed at use of cryptos rather than a total ban,” The Economic Times quotes an official with knowledge of the matter.
The Economic Times claims that the Indian finance ministry was monitoring the growing volume of cryptocurrency trading in the country, and Anurag Thakur, Minister of State for Finance and Corporate Affairs, has had meetings with members from the crypto and banking industry on this subject.
India & Crypto Regulation: The Journey So Far
In 2018, the Reserve Bank of India (RBI) halted cryptocurrency trading and banned banks and financial institutions from allowing users to trade in cryptocurrencies. However, in the early days of 2020, Indian Supreme Court overturned the crypto ban following a petition filed by Indian crypto entrepreneurs and IAMAI.
In 2021, the Indian government declared that it will issue a new bill on cryptocurrencies in March – the bill was to be titled “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.” Contrasted to everyone’s expectation, the bill was deferred and no specific reason was reported.
Nevertheless, in recent months, Indian Finance minister Nirmala Sitharaman reiterated that the country will take a “calibrated” view on the crypto market and reassured the public that they are not changing their mind on the matter.