The text defining a national framework for digital assets is almost complete
Monday, at an event held by the Ministry of Labour and Employment, Economic Affairs Secretary Ajay Seth said that his department is nearing completion of the consultation document that will clarify the country's position on cryptocurrencies.
The paper was developed with input from industry players, the International Monetary Fund, and the World Bank. The study will enhance India's commitment to "some type of global regulations," according to Seth.
In response to a query on the possibility of an absolute ban, the official recognised that a countrywide prohibition would not be effective on its own:
Whatever we do, even if we go to the extreme form, the countries that have chosen to prohibit, they can’t succeed unless there is a global consensus.
In recent years, India has shown a pretty aggressive stance against crypto. In 2017, the Reserve Bank of India (RBI) and the Ministry of Finance linked digital currencies to Ponzi schemes and forbade commercial banks and lenders from engaging in any transactions using digital currency.
Long after the ban was formally lifted in 2022, the RBI issued a warning about the "dollarization" threat posed by cryptocurrencies; and in his recent virtual speech at the World Economic Forum, Indian Prime Minister Narendra Modi called cryptocurrencies a global challenge that requires "collective and synchronised action" from all national and international bodies.