News: India May Treat Cryptocurrencies As Commodities, Instead Of A Complete Ban
Following quite a while of vulnerability, finally, the clouds are dispersing to reveal that India may not choose to ban cryptocurrencies in totality and rather it may be recommended by the finance ministry panel set up to study them that cryptocurrencies be treated as commodities, one of the seniors in the panel told Quartz yesterday.
According to Quartz, the senior official stated that:
“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,”
He also added that the main concern of the committee lies in tracking the investors and funds to prevent money laundering and illegal financing and expressed that:
“Trade is not a criminal offense. Most of us trade in various asset classes in the stock market. So how is this (cryptocurrency trading) 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,”
To this, co-founder of a Pune-based crypto exchange, Shubham Yadav said:
“Though cryptocurrencies belong to a new class of financial assets, we can still welcome them as commodities and not currencies because of their high volatile prices. We are also ready to work with the government and assist them on creating a regulatory framework. We can help them in designing a monitoring system for blockchain where it can remotely monitor all transactions"
As reported by Quartz, the former deputy governor of Reserve Bank of India stated that treating cryptocurrencies as commodities would clearly pass a message to investors that such virtual currencies like Bitcoin aren't real currencies. He further added:
“If these are used to settle transactions, then it acquires the nature of currency. So that is one thing that one needs to be wary of. But if people want to invest in a commodity then that is different, because then we can assume that they are aware of the risks involved.”
After RBI's announcement to stop providing services to any cryptocurrency related business or individual and the recent SC's decision of instructing the banks to discontinue any crypto related services, it now seems that finally, cryptocurrencies would be getting a recognition in India which certainly would be relief-giving to the crypto community in India.
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