The Indian government aims to regulate cryptocurrency in the forthcoming Winter Session of parliament, following its neighbor, China, which recently clamped down on all things crypto. Contrary to common assumptions, there will not be a total ban on digital currencies, although some are anticipated to be phased out.
There are no digital currency-specific rules in India, but the government isn’t fond of those who use them. The Reserve Bank of India, India’s central bank, has discouraged people from investing in it on multiple occasions, although in an unofficial capacity. Certain institutions (both public and private) went even farther and demanded an explanation from some investors about their holdings.
In India, the only legitimate option to buy bitcoin is via exchanges like WazirX. Although there is no official statistics on the number of cryptocurrency investors in India, industry estimates suggest that there are roughly 15-20 million users with assets worth more than INR 400 billion (US$5.39 billion). That’s a big number, so watching how investors respond to the new regulations will be fascinating.
Apart from controlling digital currencies, the Indian government intends to launch its digital currency, similar to China’s Digital Yuan program. That is why it does not wish to prohibit all coins simply. Before outright banning third-party currencies, the government wants to understand more about managing digital currency infrastructure.