India may not put a blanket ban on cryptocurrencies and it may decide to treat them as commodities, Quartz has reported, citing an unnamed government official.
According to the July 11 report, a finance ministry panel has been set up to study the digital coins and it may suggest that they should be treated as commodities.
“I don’t think anyone is really thinking of banning it (cryptocurrencies) altogether. The issue here is about regulating the trade and we need to know where the money is coming from. Allowing it as (a) commodity may let us better regulate trade and so that is being looked at,” the source said, as quoted by Quartz.
The official also said that the panel’s main concern was keeping track of investors and funds to reduce money laundering and illegitimate financing.
“Trade is not a criminal offence. Most of us trade in various asset classes in the stock market. So how is this (cryptocurrency trading) any different? What has to be in place is a mechanism to be sure that the money used is not illegal money, and to track its source is the most important thing,” the official said.
Treating digital currencies as commodities will make it clear to some investors that Bitcoin (BTC) and its crypto peers are not real currencies, according to R Gandhi, former deputy governor of the Reserve Bank of India (RBI).
“If people want to invest in a commodity then that is different, because then we can assume that they are aware of the risks involved,” Gandhi said, as quoted by Quartz.
Meanwhile, Indian crypto exchanges have already demonstrated willingness to address the government’s concerns over security by implementing know-your-customer and anti-money laundering guidelines. They have also said they are willing to incorporate more suggestions.