Earn Your First Bitcoin Sign up and get $12 Bonus Referral bonus up to $3,000Sign up
The cryptocurrency situation in India is very peculiar. An initial ban on Bitcoin trading has been introduced, although it may not stand. Authorities are now contemplating to classify cryptocurrencies as commodities.
Another Regulatory Change for India?
The current ban on Bitcoin-rupee trading in India is very controversial. RBI’s decision is not based on market sentiment or thorough research. For domestic cryptocurrency exchanges, it causes many different issues. Most platforms have transitioned to a crypto-only trading business model to survive. Indian authorities are taking note of the repercussions caused by this blanket ban on trading.
Local sources claim the government is contemplating a different approach. Labeling cryptocurrencies as commodities appear to be the new potential outcome. This has not been officially confirmed by any official spokespeople. This new label as commodities would dissolve the blanket ban on trading altogether.
One government official confirms this ban was never the intended outcome. Cryptocurrency is not outlawed in India, nor are there any plans to pursue this option. Instead, regulation is currently being worked on to thwart money laundering and criminal activity. An official stated that the government’s goal is to make “sure that the money used is not illegal money, and to track its source is the most important thing.”
Uncertainty Remains in Place
All of these developments cause confusion among Indian cryptocurrency enthusiasts. Changing the regulatory landscape on a whim’s notice is always troublesome. A regulatory framework for Bitcoin is still under development at this time. Until it is introduced, there can be no official ban on rupee-based trading. Even so, the RBI will enforce their vision until told otherwise.
Trading has never been a criminal offense. Whether it is stocks, currencies, precious metals, or cryptocurrencies. there is no reason to ban such activity. Although cryptocurrency is a different breed of asset, the decision by the RBI creates unnecessary friction. A tool or framework to prevent criminal activity is far more favorable.
The commodity label offers many advantages for Bitcoin. It allows for introducing existing trading regulations associated with other commodities. When these developments will be made official remains unclear. No specific timeline has been proposed to facilitate these potential changes.
When do you think India will introduce legislation to regulate cryptocurrencies as commodities? Let us know in the comments below.
Images courtesy of Shutterstock.