India has decided to introduce a policy that requires pre-approval and prior registration of cryptocurrencies before they could be enlisted at a trading and exchange platform. Furthermore, the Government of India is committed to introducing Indian crypto law before the expiry of 2021.
Prior to the launching of national crypto regulation, the Government of India has introduced a separate policy on the subject of cryptocurrencies. The policy suggests that only pre-approved and registered cryptocurrencies will be traded and exchanged at crypto platforms. Without the registration and approval, none of the Indian exchanges would be allowed to enlist any non-approved or non-registered cryptocurrencies. This is a condition precedent contained in the policy and no exemption or exception will be granted to anyone, clarified Indian Government.
However, the Government of India has deliberately made the process of obtaining approvals a bit tidy. The objective behind this is to discourage Indians to invest in crypto because the Government believes crypto trading is harmful. It was further clarified that exchanges will be allowed to trade registered digital currencies only. Failing to meet the requirements would invite the taking legal action and imposition of penalties by the Government and relevant authorities. It was told that the fines will be exorbitant and enforcement action may involve arrests of individuals and filing of FIRs.
In the meantime, there is a possibility that the Indian Government might be introducing crypto laws before the expiry of 2021. Several sources suggest that India is likely to finalize the law in upcoming Parliamentary sessions due for commencement on 29th November 2021. There was also news in the local Indian press suggesting that the Government wants to hurry up things. The reason for hurriedness is two-fold. Firstly, the Indian crypto space is growing faster than anywhere in the world. Secondly, the Indian Government has decided it should tax crypto and earn revenues from the Indian crypto industry.
Very recently, it was also noted in the press that the proposed crypto law of India was once again revisited. During the review process, the proposal has been further amended to include more provisions of crypto relevance.
Narendra Modi, who is the Indian Prime Minister, too has taken notice of cryptocurrencies’ existence in India. However, he was concerned that the country’s youth will be exposed to dangers if they haven’t been warned against the use of crypto. He commented that Bitcoin though is a profitable asset yet if it is in the wrong hands, then it can be disastrous. After making this comment, the Prime Minister then urged the global leaders to ensure that Bitcoin should not be misused. It was for the very first time that an Indian Prime Minister had ever made a reference to digital currencies and commented on Bitcoin.
Apparently, the Indian Government along with their Prime Minister do promote the idea of having a digital Indian Rupee. As a matter of fact, the Reserve Bank of India is already working on a project which involves the digitalization of Indian currency.