Government likely to take ‘middle path’ on crypto bill: Report

Government has pointed towards regulation of cryptocurrency and that it is working with different stakeholders

The government is likely to take a “middle path” on cryptocurrencies as it finalises a digital assets bill that may be tabled in the upcoming winter session of Parliament, The Economic Times has reported about the keenly watched piece of legislation as cryptocurrency gains popularity among young Indians.

“A balance has to be found,” the report cites a person as saying, adding that a final call on the details of the proposed law would be taken shortly. “A middle path that balances the concerns of all stakeholders is more likely.”

The person added that the bill would take into account the technological developments in the digital asset space, which the earlier draft lacked.

A high-level inter-ministerial committee constituted by the finance ministry has examined the policy and legal frameworks and recommended the introduction of CBDC as a digital form of fiat money in the country.

The Reserve Bank of India had banned cryptocurrencies but the order was struck down by the Supreme Court in March 2020.

The government, which has talked about regulating cryptocurrency, has said it is working with different stakeholders. Finance Minister Nirmala Sitharam had told The Economic Times that the government was “not against cryptocurrency and will instead look into ways it can help the country's fintech sector”.

The market watchdog had barred investment advisers from advising on unregulated instruments including cryptocurrencies, digital gold and other such products.

"It has come to the notice of SEBI that some registered investment advisers are engaged in unregulated activity by providing platform for buying/ selling/ dealing in unregulated products including digital gold," the Securities and Exchange Board of India said on October 21.

India's cryptocurrency market expanded 641 percent in the past year, driving growth of digital currencies in central and Southern Asia, according to a report by Chainalaysis.

The cryptocurrency market in Pakistan expanded by 711 percent last year, the report added. Three countries from the Central & Southern Asia and Oceania (CSAO) region are part of Chainalysis' Global Crypto Adoption Index - Vietnam at number one, India at two, and Pakistan at three.