India Not Looking to Ban Cryptocurrencies, Official Says

 In Altcoins, Exchanges, Governments and Regulations

An official from the Indian government speaking on the condition of anonymity reveals plans that the country may have in the future with regards to cryptocurrencies.

The Indian cryptocurrency market, which was recently rocked by a central bank policy that enacted a de facto ban on these assets, may have some hope after all. At the very least, this is what one government official said to Quartz, speaking under the condition of anonymity.

“I don’t think anyone is really thinking of banning [cryptocurrencies] altogether. The issue here is about regulating the trade and we need to know where the money is coming from. Allowing it as [a] commodity may let us better regulate trade and so that is being looked at,” said the senior government official.

Just a few months ago, cryptocurrency traders and exchanges began to rally against the measures from the Reserve Bank of India (RBI), which has instructed commercial banks to stop servicing the accounts of operators on the coin market.

This may have had an effect after all, as Subhash Chandra Garg, the joint secretary of the department of economic affairs, said that draft regulations should be finished soon. The cryptocurrency task force, set up by the Indian government, however, is made up by financial regulators that include the deputy governor of RBI.

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Although the future is still uncertain, we now know that the committee set up to draft these initial regulations is primarily concerned with tracing fund sources and preventing money laundering, according to the senior official who spoke to Quartz.

“Trade is not a criminal offense. Most of us trade in various asset classes on the stock market. So how is this any different? What has to be in place is a mechanism to be sure that the money used is not illegal money, and to track its source is the most important thing,” the official added.

Most likely, India would end up regulating cryptocurrencies as a new type of financial instrument but put market players under the jurisdiction of current AML/KYC regulations implemented by the banking sector. In this case RBI may lift its order to commercial banks any day now.

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