The central government may form a panel to study cryptocurrency regulations. This was recommended by a committee headed by former finance secretary Subhash Garg in 2019. The new committee may explore the use of Blockchain for technological advancement and suggest new ways to regulate crypto as a digital asset. They may also be asked to study the ways to operationalize the Reserve Bank of India’s proposed digital rupee.
“There is a view within the government that recommendations made by Subash Garg committee are dated and a fresh look is needed at the use of cryptos rather than a total ban,” said an official in the know of the matter.
These discussions are at early stage and no formal resolutions has yet been passed.
The Finance ministry was monitoring the growing volume of cryptocurrency trading in India and is talking to stakeholders on potential supervisory risks. Finance Minister Nirmala Sitharaman’s team is expected to brief later this month around the ongoing developments in the cryptocurrency space, amid massive traction on crypto exchanges on sustained retail demand, another source said.
The Cryptocurrency and Regulation of official Digital Currency Bill 2021 was scheduled to be tabled in Budget session of Parliament in March. However, this bill was deferred and was not made public.
It is widely expected that the proposed legilation will be tabled in upcoming session. The draft bill is based on Garg’s recommendations. The Bill, in its current form, is expected to not only criminalize trading but also the holding of cryptocurrency assets.
In 2018, RBI had banned all banks from allowing customers to trade in cryptocurrency. However, the Supreme Court overturned the ban in February 2020 after a petition filed by Indian crypto entrepreneurs and technology and internet industry association IAMAI.