India’s Government to Regulate, Not Ban Crypto

Local media reports conclude the government will regulate crypto as a commodity, and prohibit its use as a payment mechanism, while building infrastructure for KYC/AML around fiat gateways.

article-image

The Indian Parliament building in New Delhi; Source: Shutterstock

share

key takeaways

  • A CNN affiliate in India has confirmed that the government isn’t seeking a total crypto ban with its new bill, but rather mechanisms to regulate the asset class as a commodity
  • The government is particularly concerned about crypto’s potential role in financing terrorism

On Wednesday, Blockworks reported on language in a recent bill before India’s parliament that mentioned a ban of all “private cryptocurrency”. Local media in the country have now confirmed with their government sources that the government’s intent is something different. 

According to a local CNN Affiliate in-country, the government intends to regulate crypto and is primarily concerned with its use in the underground economy and terror financing. A wholesale ban is not in the works. 

Loading Tweet..

To do this, the government intends to not recognize crypto as tender and put in a comprehensive KYC/AML mechanism at the various fiat gateways in-country. 

“A strict mechanism will be in place so that law enforcement agencies can trace the origin of cryptocurrency used for illegal or anti-national work,” CNN’s sources said. 

Speaking with CNBC’s Squawk Box Asia, Avinash Shekhar, co-CEO of Zebpay, an exchange, said that their initial discussions with the government had “positive vibes.”

“There has been lots of positive vibes from the government. We met the finance committee of Parliament around two weeks back,” he told CNBC.

“The message or the feelers which we are getting from the government is that they’re looking for some kind of regulation — strict regulation, but not a complete ban.”

Regardless, local traders in India engaged in extensive panic selling, thinking that the ban would be more extensive than initially reported. 

On WazirX, an Indian exchange, bitcoin traded at a 15% discount at one point before recovering.

Source: WazirX

Since then, the panic selling has subsided and prices have leveled out. 

A report from Bloomberg also said that the government isn’t planning a wholesale ban, but may consider limiting the accessibility of exchanges to accredited investors.

Globally, the price of bitcoin has remained steady at $57,984 down 2.4% over the last 24 hours according to CoinGecko.


Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.


Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

4.png

Research

This months PPGC covered four main areas. Firstly, debriefing the progress and status of the mainnet implementation of the Ahmedabad hard fork. Secondly, a retrospective on the testnet phase of the Ahemdabad Hard Fork. Thirdly, an update on PIP-36 which involves replaying failed state syncs. Lastly, PIP-47 which pushes upgrades to the Polygon Protocol Council.

article-image

Gurbir Grewal, who has been at the agency almost as long as Gensler has been chair, will depart on Oct. 11, 2024

article-image

The stablecoin’s supply has declined about 50% in the last month, from $660 million to $320 million

article-image

Plus, Sky’s soaring stablecoin and simpler bitcoin staking

article-image

Bitwise took the initial steps for an XRP ETF Wednesday

article-image

Plus, enrollment for the Donald Trump-backed crypto project is underway