- India’s PM has led a meeting in which officials agreed to formulate regulations for the cryptocurrency industry.
- This is a change of tune from the previous stance in which it was reported that India was planning on banning Bitcoin altogether.
India plans on regulating the cryptocurrency industry. According to reports, the Indian Prime Minister chaired a meeting on Saturday in which officials resolved to regulate the sector. This is a great shift from the Indian government’s previous stance of a blanket ban on Bitcoin.
Prime Minister Narendra Modi chaired the meeting in which cryptocurrencies took center stage, sources in the meeting told one news outlet. The officials in the meeting, who came from the highest offices in the Indian financial space, resolved to push for the formulation and implementation of positive regulations for the sector.
However, they were concerned about the risk of money laundering and terror financing, the source said.
The government is cognizant of the fact that this is an evolving technology, it will keep a close watch and take proactive steps. There was consensus also that the steps taken in this field by the government will be progressive and forward-looking.
To come up with enabling regulations that will push the sector forward, the government will engage with local experts and other stakeholders, It will also seek the input of experts beyond India as cryptocurrencies span the global financial space.
The source added:
It was also an outcome of a consultative process as RBI, Finance Ministry, Home Ministry had done an elaborate exercise on it as well as consulted experts from across the country and the world. Global examples and best practices were also looked at.
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India won’t ban Bitcoin, but ads cause concern
The outcome of the meeting is a big win for the cryptocurrency industry in India. The country has a huge Bitcoin sector, which is still growing at an extremely aggressive pace. According to one study, India has over 100 miliion cryptocurrency owners, making it the largest market in the world and four times higher than second-placed U.S.
Local exchanges have been recording massive numbers in trading volume growth and new user signups. Just recently, WazirX, the Indian exchange owned by Binance, revealed it facilitated $38 billion worth of trades in the past year at a 44 percent month-on-month growth rate. It userbase grew tenfold to 10 million in this time.
Despite the growth, the government has been slow to catch up. The Reserve Bank of India has even been actively trying to stifle this growth. It had imposed a ban on all banks from working with cryptocurrency firms and users, but it was lifted earlier this year. The governor is still as pessimistic and has kept on attacking Bitcoin, however.
The government has been reported to be considering a blanket ban for several months now. Some sources had even revealed that the process of making a law that makes Bitcoin illegal was underway, with the purported support of the Modi government.
However, the recent meeting has shone some light on the industry and will hopefully lead to more stability and growth.
And while Bitcoin will be legalized, advertisements by the local firms are causing the government a great deal of concern. Indian exchanges have been spending millions of dollars on the ads, targeting the young population. They have brought in several celebrities, from Bollywood stars to sports icons, to push their brands.
These flashy ads will most likely be curbed, or at the very least, taken down a notch. One of the concerns the government has is that they don’t portray cryptocurrency trading as risky. Some even guarantee profits, which is the hallmark of a scam in the wider global cryptocurrency community.