India’s upcoming crypto bill, which has yet to be introduced in parliament, might not want to ban cryptocurrencies. However, the Economic Times reports that exchange-to-exchange transfers are likely to be restricted.
According to the Indian publication, sources consider there might be a blanket ban on trade amongst bourses, restrictions on wallets that masks the owner’s identification and the blocking of Google Chrome extensions that permit users to move round greater than 4,000 cryptos — suppose MetaMask and different wallet integrations.
The Indian government could also consider creating a uniform wallet, such as a Demat account, to keep an eye on retail crypto transactions.
Cryptocurrency exchanges will need to provide quarterly disclosures to the government
Sources told The Economic Times that the government is mulling over a mechanism that would monitor all inflows and outflows of the Indian rupee on Indian cryptocurrency exchanges and that only they would be allowed to operate in the country. This could involve opening up their ledgers to the government on a quarterly basis.
The goal would be to bring the cryptocurrency exchanges to the same level as other stock or commodity exchanges in the country. And keep cryptocurrency transactions from working the Foreign Exchange Regulation Act (FEMA).
It comes after NDTV reported that the Securities and Exchange Board of India (SEBI) is likely to get involved in regulating the cryptocurrency industry. The same note also pointed out that investors in India will not be allowed to store their holdings in foreign cryptocurrency exchanges or private wallets.
Once the bill becomes law, these people will have a given certain amount of time to make the necessary changes. Otherwise, there may be penalties ranging from ₹ 5 crore to ₹ 20 crore.
India may build its own native crypto wallet
The Economic Times report also points out that as the government restricts the operation of privately owned wallets, India could create a uniform wallet similar to a demat account for cryptocurrency trading.
El Salvador, earlier this year, launched a national crypto pockets referred to as El Chivo. However, unlike India’s plan, the wallet was launched to assist the adoption of Bitcoin as legal tender. However, India has no plans to do so. The Indian Finance Minister, Sitharaman has already clarified in the Parliament that India has no plans of granting Bitcoin to the reputation of currency.
While this may be an interesting proposition for the government, supporters of the crypto universe argue that it goes against the goal of interoperability, which could limit growth.