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Tuesday, March 19 2024
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Indian Crypto Industry Gets a Fresh Chance for Regulation

crypto 23062021
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crypto 23062021

 

After a couple of failed bills to block cryptocurrency trade in India, the Centre is considering a more structured approach. Officials seem poised to review blockchain policies, propose regulations and list exceptions among crypto assets. An expert panel is also expected to help the RBI lay the foundation for a national digital currency.

 

The Government Is Exploring Crypto Possibilities

Politicians, bank circles and regulatory agencies in New Delhi have frequently given the impression that cryptocurrencies are considered a threat to the Union’s banking system. The prevailing legislative line of thought has been leaning towards a complete (or at least conditional) ban on crypto trade, investment and diversification of digital assets.

The latest reports are more encouraging for the tech industry stakeholders. Instead of a blanket ban, online media outlets suggest that Central authorities are considering a thorough review of the segment and its formal regulation. An expert committee should be assigned the task of examining the pros and cons of blockchain technology as the foundation of cryptocurrencies and its extended effects on India’s thriving digital economy.

In fact, the turnaround could result in a crucial boost for a number of online business sectors. As Mattias Bergehed of ENV Media revealed in an intervention at SEOCon Indonesia recently, the leading impact factors for the online entertainment and gaming industries in India are always closely related to payment providers and options.

Desi users value their data privacy and financial security, and crypto payments would bring an extra level of safety to popular online pastimes like mega millions India and casual gaming communities. Consumers across the Union will get access to a stable and secure payment method that is already widely accepted on a global level.

 

Crypto Assets an Opportunity Rather than a Threat

When the Reserve Bank of India (RBI) blocked all crypto trade back in 2018, the move was met with disbelief by tech investors. It left the segment in a state of uncertainty and channeled payments to offshore casinos like 10Cric. The regulation was ultimately struck down by the Supreme Court in early 2020, yet market confidence was slow to pick up in Bharat.

This was partly due to a Draft Bill proposed in 2019 by another Government committee that recommended a complete prohibition of all crypto ownership, trade and any other blockchain-based financial operations. The bill never saw the inside of Parliament, even as the committee quoted “risks and dangers associated with cryptocurrencies”, mainly viewed as a direct threat to the rupee.

Those fears had all decentralized (private) cryptocurrencies as a subject. Yet, a couple of years down the line Government sources confirm that a more profound analysis is needed as previous efforts never considered the real effects on India’s dynamic digital economy.

The new panel of experts is reported to study blockchain and crypto assets as a whole and in relation to tech industry concerns. While regulation is deemed a better option rather than a complete ban, it cannot yet be excluded, especially in view of RBI’s own crypto plans.

 

Regulators Remain Hush on Crypto Rupee

The proposed committee, in fact, will also have to provide recommendations on potential crypto market dynamics, should the RBI follow through with its initial plans to launch a digital rupee. RBI sources point out that the new national cryptocurrency might be useful in countering China’s digital Yuan as much as the global dominance of the fiat US dollar.

So far, Ministry of Finance officials have not commented on the possible regulatory framework. Bharat crypto and banking industry exponents, however, are pointing out the important levels of traction that crypto transactions exert on online exchange platforms and even retail operations. Rising investment interest across the country does not seemingly go against the stability of the financial system. If anything, it sets up the stage for better adoption rates for an RBI-issued crypto coin.

A Digital Currency Bill was not presented at the March budget session of Parliament. Evidently, authorities and regulators wish to provide a more balanced and well-justified proposal for a sector that is bound to have long-term effects on the economy.

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