Several independent bodies, including IndiaTech, have made suggestions for the upcoming crypto bill to be introduced in the Indian Parliament. As the Winter Session commenced today, IndiaTech said that the draft might seek to curtail foreign currency exposure. A local newspaper reported that this might limit what an Indian investor can buy annually in crypto assets.
With that, the crypto industry is awaiting some positive regulatory announcements after reports of private crypto ban resulted in market mayhem last week.
The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 is also reportedly looking to define and license authorized dealers and crypto exchanges. In this context, IndiaTech has also asked for “a white paper asking for stricter Know Your Customer (KYC) rules” for Indian crypto exchanges. In an interview with BusinessLine, Rameesh Kailasam, CEO, IndiaTech.Org stated,
“Also, what type of crypto, from whom you can buy and where such authorized dealer equivalents should be registered. Reporting mechanisms and authority for suspicious transaction reporting by exchanges would also be necessary.”
Crackdown on suspicious transactions
These are crucial considerations as India is one of the fastest-growing markets. The country’s crypto market recorded a growth of 641% between July 2020 and June 2021, as per Chainalysis. But, crypto businesses fear going back to the uncertainty of the first quarter of 2020, when the volatile asset class was under a ban.
But, despite that fear, Singapore-based crypto-exchange Coinstore has recently expanded its business in India.
Kailasam also added,
“There needs to be a filtration mechanism formulated on what crypto assets, tokens, etc. will be allowed to be traded in India. It is important that a mechanism should ideally be formulated on what kind of cryptocurrencies will be eligible for trade in India.”
With that, reports also cite sources that see the Indian digital rupee making it to the Parliament’s table.
It is noteworthy that the Indian central bank has maintained a cautious stance against private crypto assets. Therefore, an RBI-endorsed CBDC might be pushed in the parliament. Sources to local newspaper added,
“…government’s response is not to ban cryptocurrencies but rather to provide cryptocurrency via the RBI.”
The current Parliamentary session is scheduled to conclude on December 23. Therefore, the house will have to table and pass the crypto bill before that if it has to pass in the current session.