India’s government is reportedly reviewing modalities for banning or regulating cryptocurrencies in the country.
According to Bloomberg Quint, reports indicate that the government is in talks with financial regulators and industry stakeholders to examine the provisions of an earlier proposal that effectively called for a blanket prohibition of crypto in India.
Back in February, several reports out of India stoked fears of a possible crypto ban that has so far failed to materialize. Instead, the emerging narrative out of the country is that the authorities are considering a more nuanced approach to cryptocurrency regulations, with blanker prohibitions out of the question.
The anonymous source quoted by Bloomberg Quint said the current discussions are going over the clauses in the previous crypto ban bill to determine whether to follow through or seek an alternative approach.
According to the publication, these discussions are proceeding along three fronts. The first two issues are reportedly around whether crypto can be regulated or if the government should wield the “ban hammer.”
The third issue on the agenda is reportedly ascertaining the types of crypto activities that could be permitted under a standardized cryptocurrency regulatory paradigm in India.
The Reserve Bank of India continues to maintain its anti-crypto stance. The RBI has previously said that it has communicated its reservations about cryptocurrencies to the federal government.
Back in May, the RBI clarified that commercial banks were not under orders from the central bank to refuse service to crypto exchanges. Indeed, India’s Supreme Court in March 2020 overturned a previous RBI mandate prohibiting banks from servicing exchanges in the country.
Given the deliberate pace of the ongoing discussions, the quoted source also added that an amended crypto regulatory bill is unlikely to be introduced during the upcoming monsoon session of parliament beginning in July.
Meanwhile, three major cryptocurrency exchanges — Kraken, Bitfinex and KuCoin — are reportedly mulling an expansion of their business to India to offer services to the country’s estimated 15 million crypto investors.