India’s blockchain and cryptocurrency insiders have recommended that cryptocurrencies be seen as commodities to the ministry of finance. According to two unnamed sources, crypto pundits suggest that the Gujarat International Financial Services Centres Authority (IFSCA) regulates cryptocurrency transactions. Under the regulation of that authority, investors would be treated as commodity investors who must follow KYC compliance standards. They also recommend that investors’ individual holdings be limited to $250,000 under the Liberalised Remittance Scheme.
Indian crypto insiders had previously recommended setting up a separate entity.
The current recommendation is different from an earlier proposal, which recommended a separate entity. One participant in the discussions said, “We had earlier suggested setting up a separate Digital Asset Regulatory Authority (DARO), but the idea didn’t fly with the government as it would require a separate law altogether.” The Indian government will want to move fast, as the asset class is flocked to in the country. A recent report shows that non-metropolitan cities have played a large part in adoption. One of the country’s most popular electronics brands, Xiaomi, is also considering launching a lending platform, though it has held off for the moment.
Crypto regulations remain in a grey area.
The news is the latest development in the ongoing saga, the Indian cryptocurrency regulation scene that still remains in a grey area. The decision to regulate the market has been postponed, besides flip-flopping between a draconian stance and a reasonably encouraging one. However, the latest development suggests that the government is going for a more friendly approach. It realizes that the market has a lot to offer and can encourage growth. At the same time, it’s concerned about the fraud and the potential for illicit activity.