India is planning progressive and forward-looking measures on issues related to cryptocurrencies, a move that could be a departure from its earlier attempts to restrict the use of virtual coins, according to people familiar with the matter.
Prime Minister Narendra Modi led a review meeting on the digital currency on 13 November, and it was decided that the government will continue to proactively engage with experts and other stakeholders on the evolving technology.
There have been calls in India to impose stricter rules for transactions in virtual coins as an unregulated environment may push more domestic savings toward the asset class and could endanger household savings.
India has had a hot-and-cold relationship with digital currencies in the past few years. In 2018, it effectively banned crypto transactions after a string of frauds following PM Modi’s sudden decision to eliminate 80% of the nation’s currencies, but the Supreme Court struck down the restriction in March 2020.
The Reserve Bank of India remains a critic, but is now working on a digital currency. The government may bring in a crypto bill for the cabinet’s approval.
The meeting also concluded that attempts to mislead the country’s younger generation through over-promising and non-transparent advertisements should be stopped, the people said. It was also discussed that unregulated crypto markets cannot be allowed to become avenues for money laundering and terror financing, they said.
The meeting also considered global examples and best practices, the people said. It was highlighted that India should seek global partnerships and collective strategies on the issue, they said.
India’s parliamentary panel on finance is scheduled to meet industry experts and associations on challenges and opportunities in crypto finance on Monday.