The Indian government is getting ready for some big changes. The Economic Affairs of India are reportedly finalizing a consultation paper on cryptocurrencies, which will be handed over to the Federal Government later this year. This could be a huge step for the country and its people, as it would bring them closer to international regulatory consensus on digital assets.
On Monday, May 30, The Economic Secretary of India, Mr. Ajay Seth revealed that his department is finishing the work on a consultation paper which will define the country's stance on cryptocurrency during an event hosted by the Ministry of Labour and Employment.
The document was crafted in collaboration with stakeholders, including representatives of major industries and organizations like the International Monetary Fund (IMF) and the World Bank. According to Seth, the paper promises to strengthen India's commitment towards some sort of global regulations.
"Digital assets, whatever way we want to deal with those assets, there has to be a broad framework on which all economies have to be together."
When asked about the possible outright ban, the official acknowledged that any national-level prohibition wouldn't work in isolation, but added "we need to think about how we can combine efforts and make sure this doesn't happen."
"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."
India has been demonstrating a rather militant posture when it comes to crypto lately. The Reserve Bank of India and the Ministry of Finance have been issuing warnings about digital currencies for years now. In 2017 they compared cryptocurrencies to Ponzi schemes-which means you can't operate in any way that involves commercial banks or lenders.
In 2022, after the ban had been formally lifted on cryptocurrencies in India, the RBI sounded an alarm about the threat of "dollarization" that crypto poses, warning investors to beware. Prime minister Narendra Modi, his recent virtual speech at the World Economic Forum in Davos, called cryptocurrency a global challenge that demands a "collective and synchronized action" from all the national and international bodies.