India may be regulating crypto as an asset class under the purview of the Securities and Exchange Board of India (SEBI). In addition, a crypto bill is likely to be introduced during the Monsoon session of parliament, local media reported.
Indian Government Reportedly Considers Regulating Crypto as an Asset Class
The Indian government has yet to introduce a cryptocurrency bill. An existing bill seeks to ban cryptocurrencies. However, there have been reports of the government re-evaluating the recommendations within the bill.
The New Indian Express reported Friday that top sources tracking the crypto industry told it that “the government has moved away from its earlier hostile stance towards virtual currencies and will most likely classify bitcoin as an asset class in India soon.” The publication further conveyed:
"Market regulator Securities and Exchange Board of India (SEBI) will oversee regulations for the cryptocurrency sector after bitcoin’s classification as an asset class."
The media previously reported that the Indian government will set up a panel of experts to come up with new recommendations to oversee the cryptocurrency industry in India. Sources informed the publication that an expert panel at the Ministry of Finance is working on formulating the country’s cryptocurrency policy. The publication further conveyed:
"A cryptocurrency regulation bill is likely to be tabled in the Parliament during the Monsoon session."
The Monsoon session usually starts in July. However, last year, it did not start until September due to the coronavirus crisis. This year, the government expects the session to begin on its normal schedule.
Last week, India’s central bank, the Reserve Bank of India (RBI), issued a notice to banks regarding its April 2018 circular that banned financial institutions from providing services to crypto businesses and traders. The bank said that the circular is no longer valid per the supreme court ruling in March last year, emphasizing that banks cannot quote it when making decisions on cryptocurrency.
The central bank, however, reiterated that its position on bitcoin and other cryptocurrencies has not changed and it still has “major concerns,” RBI Governor Shakthikanta Das said, adding that they have been communicated to the finance ministry.
Ketan Surana, Director and chief financial officer of cryptocurrency exchange Coinsbit and member of Internet and Mobile Association of India (IAMAI), said: “We can definitely say that the new committee which is working on cryptocurrencies is very optimistic on cryptocurrency regulation and legislation.” The director emphasized:
"A new draft proposal will soon be in the Cabinet, which will look into the overall scenario and take the best step forward. We are very hopeful that the government will embrace cryptocurrencies and blockchain technologies."