Crypto investors in India have received some good news in that the country has decided not to ban cryptocurrency. Rather, digital assets are now going to be recognized as an entirely new asset class and will thus be regulated as so.
India Classifies Crypto as a New Asset Class
This has been a back-and-forth battle that was going even just a few weeks ago after the nation’s Parliament issued a bill to be discussed during the winter session that would set forth rather strict laws regarding the presence of cryptocurrencies in India. The bill would have seen the establishment of a bank-issued cryptocurrency – which is still in the works – and the illegalization of all private digital currencies. This meant that all crypto investors had to flock to the bank-issued asset, while private ownership of BTC, ETH, and competing altcoins would not be allowed.
The move was clearly designed to prevent anything from getting in the way of the bank-issued currency, though it looks like regulators in India are easing up the tension they’ve been feeling. Now, a new bill is being introduced that will place digital currencies under a new and unique label while still allowing people to invest. However, there are a few rules that will need to be followed.
For one thing, bitcoin and other cryptocurrencies cannot be recognized as legal tender, which in many ways, is the most disappointing thing about the bill considering these assets were initially designed to push credit cards, fiat currencies, and checks to the side and be used to purchase goods and services. The initial goal of crypto is not in line with the bill, which can only cause some upset feelings amongst diehard fans in India.
In addition, no foreign crypto investments are allowed. All traders will be expected to transfer their digital assets over to local exchanges. In other words, if you’re in India and you’re investing in crypto, your assets must be held in an exchange based in India.
People Can Still Invest
The bill is in no way perfect, but it does seem to set a lot of things straight and it is not for banning crypto investments outright. People will still get a chance to own digital currencies and trade regularly granted they do so within the bounds of their own country.
The news is good in many ways considering how many fears digital currency investors have been dealing with in India for some time. The trouble began in 2018 when the Reserve Bank of India (RBI) stated that digital currency businesses would not be permitted to utilize the services and tools of standard financial institutions, such as banks. Two years later, this rule was deemed unconstitutional by the country’s Supreme Court, though from there, talk emerged of a full-on crypto ban, and traders have been worried about this for well over a year.