India has long had a history of what to do with cryptos and has been flip-flopping on its posturing for the past few years. It did ban it a few years back only to revoke it sometime later and then it banned it again last year before the ban was struck down by the courts.
Currently, the country seems to be in a no man’s land with none of its citizens being sure on whether it is legal or not but a proposed bill in the coming months is expected to lend some clarity. The 2021 Cryptocurrency and Regulation of Official Digital Currency Bill is reported to favor the regulation of cryptos and liken it to other trading instruments like gold, stocks, etc but at the same time, ban it from being used as a form of payments. This makes sense as the usage of bitcoin and other cryptos have been the main concern of regulators all over the world as the government would have no control over it and would also not be able to track it as well. This has made the authorities very uncomfortable over the usage of private cryptos as a form of payment.
So, India seems to be trying to follow the US model where it would allow the trading to happen on the cryptos but it might crackdown on any form of payments being done through cryptos and regulation would be made to take care of the same. The idea is to allow the crypto industry to continue to grow in India but at the same time, ensure that it does not get out of control. There is also a talk of a digital currency being introduced by the Reserve Bank of India which may happen within the next couple of years depending on how CBDCs evolve in the other countries around the world. If that happens, it is likely to be controlled and tracked by the government and it would be used as a form of payment, All this points to interesting times ahead for the crypto industry within India though it remains to be seen what exact shape and form the regulation is going to take as it may also crack down on misleading ads within the country which promise exorbitant returns on crypto investors to gullible investors.