India is closer to getting cryptocurrency regulations than ever before. Two important meetings in this regard have taken place over the past week. First, Prime Minister Narendra Modi chaired a high level comprehensive meeting, where he talked about the concerns of unregulated crypto markets as they are allowing money laundering and terror financing. Then, the parliamentary panel met industry experts and stakeholders to find a future path for cryptocurrencies.

“The BACC including WazirX has met with the members of the standing committee on Finance and the conversation is a positive step in the right direction,” a WazirX Spokesperson told India Today Tech, without sharing the details of the meeting. However, both these meetings suggest that India may have given up on the idea of banning cryptocurrencies and will only look to regulate them. This means while a few things will be allowed, others won’t be.

Cryptocurrency regulation in India: What can be allowed

– Cryto trading will continue. Investors will be allowed to buy and sell cryptocurrencies from exchange platforms that follow certain guidelines.

– India’s approach towards cryptocurrencies seems to be ‘protective’. Any measure included in the crypto bill is likely to be towards ensuring that investors’ money is protected. So, anyone who has invested in crypto, need not panic.

– There are multiple signs suggesting that crypto will be classified as an asset class rather than a currency. This means people will be able to invest and grow their money in crypto.

– The government may start levying tax on cryptocurrencies. The new bill may provide better clarity on how the government plans to tax cryptocurrencies. It is believed that the government is exploring ways to generate revenue from cryptocurrencies.

Cryptocurrency regulation in India: What may not be allowed

– It will become difficult to create cryptocurrencies. As of now, anyone with a working internet connection can make a crypto coin. The regulations may ensure that only those who fulfil certain criteria are able to create crypto.

– Crypto will not become a legal tender. Earlier this year, a lot of people rallied behind the idea of cryptocurrency replacing the rupee or co-existing with it as a legal tender. That is highly unlikely now. In simple words, you will not be able to use Bitcoin to purchase a burger or pizza.

One important thing that remains to be seen is who will regulate cryptocurrencies. The Reserve Bank of India (RBI) seems to be the most logical option but has expressed intentions of introducing its own crypto. The other possible option among the existing organisations is SEBI. It won’t be surprising if the government comes up with a new body altogether for regulating crypto.