India wouldn’t put a blanket restriction on digital currencies, but instead, regard them as commodities, an unknown source in the government told news outlet Quartz July 11.
According to Quartz, a Finance Ministry board has requested an investigation on cryptocurrencies, which may propose that the government would regard them as commodities. A senior government official with knowledge of the board’s discussion disclosed to Quartz that they doubt the government to boycott cryptocurrencies.
The source said that regulators’ fundamental concern is how successfully regulating the trade and identify “where the money is coming from.” They included that, “allowing it as a commodity may let us better regulate trade and so that is being looked at.”
The authority revealed to Quartz that the board is, for the most part, worried about tracking investors and funds so as to money laundering and unlawful financing:
“Trade is not a criminal offense. 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.”
According to Quartz, previous Reserve Bank of India (RBI) deputy government R Gandhi opined that regarding cryptocurrencies as commodities would obviously demonstrate to investors that crypto isn’t real money:
“If these are used to settle transactions, then it acquires the nature of currency. So that is one thing that one needs to be wary of. But 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.”
In May, the RBI reported that it will never again give service to any individual or organization that deals with cryptocurrency, however, the bank expressed it intends to issue its own cryptocurrency later on. In January the Indian Finance Ministry gave criticized Bitcoin (BTC) and other digital currencies for their absence of intrinsic value. The Indian Finance Ministry said there is “a real and heightened risk of investment bubble of the type seen in Ponzi schemes, which can result in sudden and prolonged crash exposing investors.”