The latest Crypto reports from India say that the country is exploring how it could allow the use of certain crypto assets for financial transactions. According to DNA India, the government is not planning to change its current stance on Cryptocurrencies. Whereas a Cryptocurrency affects a country’s monetary policy, a Crypto token does not as one has to pay for it using fiat currency. As the country awaits a ruling by the Supreme Court with regard to the use of Cryptocurrencies in the country, many analysts are optimistic the ban will be lifted.
India To Introduce Crypto Regulations
Blockchain technology and Cryptocurrencies have a great potential of disrupting the financial sector and some governments have shown an interest in using the two to improve their economies. India is one of such governments and is already planning to regulate the sector and allow the use of Crypto tokens. However, DNA India has reported that the government is likely to maintain the current ban of Cryptocurrencies in the country.
The Indian government, through the ministry of finance, has created a committee to look into the matter. Subhash Chandra Garg, the secretary of the Department of Economic Affairs (DEA) will lead this committee. The board will work towards introducing regulations and developing a roadmap that will lead to the use of some Cryptocurrencies in the country. However, their work will have to pass through parliament for approval.
The Use Of Crypto Technology In Financial Transactions
According to Mr. Garg, the government has set up the committee to establish how the Crypto technology could be used in financial transactions. Another important role of the board will be to establish the kind of regulations for the sector while Cryptocurrencies remain banned. Mr. Garg told DNA that the committee will also establish other uses of the token and how to popularize it in the country.
Mr. Garg also said that their work will involve establishing how the Crypto tokens could replace smart cards. For instance, in the public sector, the committee will establish how the coins could be used in place of smart cards. He added that the token can only be bought using physical money enabling it to have no impact on the monetary policy, unlike Cryptocurrencies.
The Use Of Cryptocurrencies In India
While speaking with DNA on Friday, the secretary also revealed that the government will not consider the use of Cryptocurrencies as a legal tender in the country. He said that the virtual currencies will remain banned in the country. He added that DEA has been warning the public against investing in the sector as the government does not recognize Cryptocurrencies as currencies at all.
India was a major Cryptocurrency market until July, when a Crypto ban, issued by the Reserve Bank of India (RBI) in April became effective. In the circular, RBI prohibited banks and other financial institutions in the country from providing banking services to Crypto businesses. Consequently, many Cryptocurrency exchanges were kicked out of business.
Since the ban became effective, Crypto traders, including Cryptocurrencies exchanges and businesses moved to the court to oppose the move. Initially, RBI admitted that it had not carried out any investigations when it introduced the ban. The Supreme Court had originally planned to give a final ruling on July 20 but has since then moved it to September this year. Many Crypto analysts are hopeful that the country will consider regulation instead of a total ban of the virtual currencies.