On Wednesday, the Economic Times reported that India might bar cryptocurrencies usage for transactions or payments. However, it will allow people to hold assets like gold, shares, or bonds.
The newspaper also stated that the approach would avoid executing a complete ban. However, the government was interested in stopping crypto firms, including platforms and exchanges, from attracting new investors.
The crypto community asked Indian authorities to avoid a ban by classifying it as an asset instead of a currency to gain acceptance.
Last week, Narendra Modi, India’s Prime Minister, organized a meeting to discuss the future of cryptocurrencies. On Saturday, the source said that the meeting was concerned that unregulated crypto markets might become ways for money laundering and financing terrorism.
A person informed of conversations at that meeting said that steps taken should be proactive, forward-looking, and progressive as cryptocurrencies represent a technology that evolves fast.
Sources told the newspaper that the cabinet might receive the proposed legislation to consider the bill in the next three weeks.
The newspaper reported that India’s Securities and Exchange Board (Sebi) could represent the regulator.
The Reserve Bank of India seems unwilling to accept cryptocurrencies. They stated concerns over potential financial and macroeconomic stability risks and capital controls.
According to blockchain data platform Chainalysis, India’s digital currency market was worth $6.7 billion in 2021. This was compared to $924 million in 2020. On Tuesday, the RBI Governor repeated the central bank’s concerns. They stated there was a need for more extensive discussions about the matter.
Rupee falls in early trade while US dollar strengths
On Wednesday, the rupee weakened against the US dollar. The greenback’s strengthening as a rise in inflation in the world’s largest economy increased concerns of higher interest rates in the US.
On Wednesday, the rupee opened at 75.50 per US dollar against the previous close of 74.38. It last showed at 74.46 against the greenback. So far, the partially convertible currency has relocated in a group of 74.55-74.60 per dollar.
The dollar index (measuring the greenback’s strength against six main currency pairs) broke past the significant 96 levels on Wednesday and was last at 96.06. At the end of the last week, the index was at 95.13. In the US, Consumer Price Inflation surged to an over 30-year high of 6.3 percent at the beginning of October. The 10-year US Treasury note yield was last at 1.65 percent, one point higher than the prior close.