Indian regulators are discussing the potential ban on cryptocurrencies like Bitcoin and Ether, aiming to promote the digital rupee.

Consultations with Experts

According to the Hindustan Times, the Indian government has consulted key institutions and regulators about private cryptocurrencies and stablecoins. The conclusion was that the risks outweigh the benefits provided by these digital assets. The government is expected to issue a discussion paper on this topic shortly.

Authorities' Stance

Indian authorities have concluded that Central Bank Digital Currencies (CBDCs) can offer everything cryptocurrencies do but with fewer risks. Earlier this year, the Secretary of Economic Affairs, Ajay Seth, announced a discussion paper to clarify the country's official stance on cryptocurrencies. Tax authorities have also imposed a 30% profit tax on cryptocurrencies and a 1% source tax.

India's History with Cryptocurrencies

In 2018, the Reserve Bank of India banned banks from processing crypto transactions, but this ban was overturned by the Supreme Court in 2020. Since then, the country has been in a back-and-forth discussion about introducing its own digital currencies, with the Reserve Bank of India and the Finance Minister continuing to express concerns over economic stability related to cryptocurrencies.

India is moving towards a clearer definition of its cryptocurrency policy with a focus on promoting the digital rupee, potentially leading to a ban on private cryptocurrencies.