Finance Minister Nirmala Sitharaman last Monday said an approval from the Cabinet on the bill to regulate cryptocurrency is pending. The inter-ministerial panel (IMC) on cryptocurrency constituted to study the issues related to virtual currencies and propose specific actions had already submitted its report in February 2019.
The IMC had recommended a blanket ban on private cryptocurrencies like bitcoin, dogecoin, etc. As on date, cryptocurrencies are a legal grey area for Indian investors.
The cryptocurrency bill was expected to be tabled during the monsoon session which didnot happen. A draft bill which was circulated earlier this year based on the IMC report sought “to prohibit all private cryptocurrencies in India”, while allowing few exceptions in order to promote the technology behind cryptocurrencies and their uses.
The IMC was headed by Finance Secretary Subash Chandra Garg with other members including MeitY Secretary Ajay Prakash Sawhney, SEBI Chairman Ajay Tyagi, and RBI Deputy Governor BP Kanungo.
Earlier this month, the Lok Sabha was informed that the government is examining the IMC report on imposing a ban on cryptocurrencies. The tax deparment is also working to clarify the ambiguities on taxation involving cryptocurrencies.
Increased Adoption of Crypto Trading:
Considering the rapid adoption of crypto trading and growth of Indian exchanges like WazirX, CoinDCX, the government is now mulling to regulate the industry than to impose a blanket ban on the private cryptocurrencies. That means, the earlier circulated bill will be modified by the government. Cryptocurrency adoption among individual investors has surged nearly 881% in past 12 months, according to crypto-analysis firm Chainalysis. As per Chainalysis report, emerging markets like Vietnam, India, and Pakistan have seen wide adoption in the past 12 months.
The growth is primarily driven by peer-to-peer (P2P) platform trading, the report revealed.The central bank, which is working on central bank digital currency, had already conveyed its reservations to the government on the private cryptocurrencies.