The Indian governing body will reportedly take measures to eliminate the use of cryptocurrencies as part of the country’s financial system. However, the existence of digital assets issued by the State is not threatened.
Cryptocurrencies Fund Illegal Activities
According to a recent report by The Economic Times, the government of India plans to crack down on the use of digital currencies as many criminals employ them to fund their illegal operations. The authorities believe virtual assets should not take part in the nation’s economic network. Pankaj Chaudhary – the Minister of State of Finance – commented:
“The government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.”
The Inter-Ministerial Committee (IMC) constituted under the Chairmanship of Secretary, though, recommended that the government should ban only private cryptocurrencies. At the same time, India should not prohibit virtual assets issued by the State.
Chaudhary stated that the top authorities of the Asian nation would consider the propositions of the IMC and announce their decision in Parliament.
India’s Controversial Crypto Stance
The world’s second-most populated country has been quite indecisive in its cryptocurrency endeavors for years. For example, in March this year, the Indian authorities considered criminalizing holding, mining, and trading with digital assets. They implied that entering the crypto market could even lead to jail time.
Two months later, though, the government reconsidered its tactics and started contemplating whether to impose cryptocurrency restrictions instead of a complete ban. The officials stated they would utilize blockchain for “technological enhancement” and propose new ways to regulate cryptocurrencies as digital assets instead of currencies.
It is worth noting that while the authorities do not have a clear stance on digital assets, a large chunk of India’s population is keen on them. As CryptoPotato recently reported, locals have invested in the crypto market 200 times more this year than in 2020.
Interestingly, Indians, well-known as gold lovers, started switching to bitcoin and altcoin investments leaving the precious metal behind. A local investor explained why crypto assets are increasing in popularity:
“I would rather put my money in crypto than gold. Crypto is more transparent than gold or assets and yields higher returns in a shorter period of time.”