According to the BloombergQuint report, regulators, stakeholders, and the government is addressing three key issues in legislation that could ban cryptocurrencies in the country. First, whether or not to impose a total prohibition on cryptocurrencies in India. If they decide against this, the next consideration will be how authorities should regulate them. Finally, they will also consider which kinds of activities should be permitted and discouraged. India is behind if compared to other countries when it comes to regulating cryptocurrencies.
Government attempts to regulate the crypto market.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, was introduced during the Indian Parliament’s Budget Session. However, for undisclosed reasons, no action was taken. The government is combing through the bill clause-by-clause. The situation is unlikely to be resolved during the upcoming Monsoon Session of the Parliament. Earlier, the central government had considered convening a fresh panel of experts to discuss crypto regulations following a similar panel in 2017. In 2018, the Reserve Bank of India (RBI) barred financial institutions from dealing with cryptocurrency-related businesses and customers. However, the Supreme Court struck down this measure in March 2020.
Global crypto exchanges are eyeing the Indian market.
Despite regulatory uncertainty, global crypto exchanges are still considering how to enter the Indian market. Reportedly, Kraken, Bitfinex, and KuCoin have all initiated talks to better understand the Indian market and entry points. Earlier, the crypto exchange giant Binance set a precedent by acquiring WazirX in 2019. However, the oldest crypto exchange in the country has been facing some difficulties recently. Aside from issues with lenders mentioned above, the exchange recently struggled to deal with spiking volume from demand for Dogecoin.