The Centre is firming up a legislation that will enable regulation of crypto asset trading, according to a report in The Economic Times which also said use of virtual currencies for payments and transactions may get banned.
Exchanges and platforms will also not be allowed to actively solicit customers, the report said, quoting unnamed officials.
The Securities and Exchange Board of India (Sebi) may be named as the regulator of crypto assets trading, said report, adding that a final decision in this regard is not taken yet. The legislation will address taxes and other issues, according to The Economic Times.
The parliamentary standing committee on finance seemed to favour regulation and not an outright ban, said the report.
A bill on cryptocurrencies is likely to be introduced in Parliament in the winter session. The overall opinion within the government is that the efforts taken should be “progressive and forward-looking” as it is an evolving technology, the report said.
The Reserve Bank of India (RBI) has expressed its opposition to cryptocurrencies saying that it could jeopardise macroeconomic and financial stability, as well as capital controls.
The number of cryptocurrency accounts in India looks to be inflated, RBI governor Shaktikanta Das had said. The numbers look clearly exaggerated as the bulk of them, say over 70%, have invested only about Rs 1,000 each in cryptocurrencies, the governor had said.
It was also flagged that in case of chaos in the crypto market and small investors will lose money and the government and the regulator would find themselves at the receiving end of public criticism.
Cryptocurrencies are also a cause of worry for security agencies as they fear wider use of virtual currencies in money laundering and terror funding.
Crypto exchanges have calculated that about 105 million Indians hold crypto assets and about 1 million trade in them.