Chairman of the Parliamentary Standing Committee on Finance Jayant Sinha said during an online event that the government of  India would take a distinctive approach towards regulation of cryptocurrencies in India that will be different from the western markets. This statement comes amid uncertainty among Indian stakeholders caused due to the long anticipation of regulation. India has a strong base of cryptocurrency exchanges and crypto investors, but the country has not yet recognized cryptocurrencies as a legal asset or currency.

 

At the crypto asset conference HODL – 2021, organized by the Blockchain and Crypto Assets Council (BACC) of Internet and Mobile Association of India (IAMAI), Jayant Sinha said that India would not follow the United States, Japan, or El Salvador in its approach towards cryptocurrencies.

 

He said, “Our solution will have to be distinct and unique for India, simply because of our unique circumstances.” The MP and former Minister of State for Finance added that regulating cryptocurrencies would involve “stakeholder consultations” after getting approvals from the parliament. “It would be good if we have global standards and then if there is something above and beyond the global standards, that is unique to India, that can also be developed and worked,” Sinha said. He believes that India needs to consider legislation on cryptocurrencies keeping national security concerns in mind.

 

In late January, the government introduced a bill that proposed the prohibition of “all private cryptocurrencies” in the country and developed a framework for creating an official digital currency issued by the Reserve Bank of India (RBI). Just a couple of days after the bill got listed on the Lok Sabha bulletin, Minister of State for Finance Anurag Singh Thakur said that the government “does not consider cryptocurrencies legal tender or coins.” He also mentioned that the government would take all measures to eliminate crypto assets in illegal activities or as part of the payment system.

 

Those two major milestones, along with RBI’s ban on cryptocurrencies that was quashed by the Supreme Court last year, have collectively raised concerns among investors in the country. However, major cryptocurrency stakeholders are still optimistic and consider the comments from Sinha to indicate a positive move by the government.

 

Avinash Shekhar, Co-CEO of Singapore-based cryptocurrency exchange ZebPay, said, “We agree with what Mr. Sinha mentioned. India has its own unique strengths and issues when it comes to implementing laws and regulations around crypto, and we’re looking forward to a regulatory framework that matches these unique needs.”

 

Nischal Shetty, CEO of Indian cryptocurrency exchange WazirX, said, “We are optimistic and look forward to working closely with the government in regulating crypto in a manner that fosters innovation. We further hope that the government consults with the industry players and takes into consideration their recommendations before finalizing the bill.” He added that the demand for cryptocurrencies in India had been steadily rising. This move by the government could be a significant boost to the crypto ecosystem as a whole.

 

Sharan Nair, Chief Business Officer of Bengaluru-based cryptocurrency trading platform CoinSwitch Kuber, also agreed to the comments made by Sinha, saying, “The laws around crypto can’t simply be replicated from how other countries treat crypto. In this process, crypto exchanges like CoinSwitch Kuber are more than willing to work alongside the regulators and policymakers to define laws that keep the nation’s interest in mind.”

 

India is said to have about 15 million investors in cryptocurrencies, and that number is growing steadily. Along with Indian cryptocurrency exchanges and trading platforms, global players in the cryptocurrency market also believe that India has massive potential to help grow digital currencies worldwide.

 

Vincent Lau, Managing Director of International Operations, Seychelles-based Huobi Global, said, “Once we have the regulatory framework for cryptocurrencies in place, the industry will be well-poised for growth. We will continue to evolve our operations to meet the requirements of India’s regulatory environment as part of our global expansion strategy.”

 

However, even as stakeholders await a long-due law to regulate cryptocurrencies in India, RBI Governor Shaktikanta Das has raised concerns yet again. He said, at an event on 9th September, “We have serious, major concerns on cryptocurrency concerning financial stability, have conveyed the same to government of India.” He added that there needs to be more clarity on the contribution of cryptocurrency to the economy.