India’s blockchain and cryptocurrency insider has sent a fresh recommendation to the government urging it to regulate cryptocurrencies as commodities, according to Economic Times report.
It further suggested that Gujarat’s International Financial Services Centres Authority (IFSCA) could regulate all crypto transactions in the country.
According to the new recommendation sent to the Ministry of Finance, the authorities and investors of cryptocurrencies should be treated as commodity investors by the regulator. Also, the members of the Indian crypto industry should follow the KYC compliance standards.
The insiders have further suggested limiting the crypto holdings to $250,000 under the Liberalised Remittance Scheme. However, there is a great chance that crypto investors oppose this scheme.
One of the crypto insiders has claimed this recent proposal to be different from the earlier one, which had advised the government to use cryptocurrency as a separate entity. He further mentioned, “We had earlier suggested setting up a separate Digital Asset Regulatory Authority (DARO), but the idea didn’t fly with the government as it would require a separate law altogether.”
In a recently published report, it has been stated that tier-2 and tier-3 cities of India have contributed the most to crypto adoption. Seeing this development, the Indian Government would surely be wanting to move fast in regulating cryptocurrencies.
It is to be noted that one of India’s most famous electronic brands Xiaomi is also planning to introduce a crypto lending platform, however, for a time being the company has put a pause on this idea.
Apart from this, the Indian crypto exchanges are also performing well in the market. Recently, CoinDCX, one of India’s leading crypto exchanges has become the country’s first crypto unicorn company.
It is being expected that clearer regulation for the crypto industry would help the crypto-related companies in their growth.
Currently, the Indian Government has been working on bringing in a crypto bill to regulated digital assets in the country.
For quite a long time now, the government has been planning to introduce a bill, but could not do so.
Also, earlier, it was reported that the government would be banning cryptocurrency, however, later, it denied the news and announced to try a more friendly approach.
The government has realized that the crypto market has a lot to offer and could encourage growth. But it is also concerned about the frauds and illicit activities which could be processed through it.
India has also initiated a research program for its own digital currency. As per the reports, the RBI might introduce the central bank digital currency (CBDC) in different phases.
Presently, the government has not spoken much about it, but there are chances that by the end of the year, the government makes some announcements related to CBDC.