Indian Government Debates a Crypto Ban to Emphasize CBDC

• The Indian government in its survey for a discussion paper has begun considering a crypto ban.
• Officials had announced a release of a discussion paper for crypto regulations in September.

The cryptocurrency sector faces regulatory discrimination on a daily basis and combating them isn’t a novelty. However, certain huge shifts may take us by surprise at first sight. For instance, in July, the US SEC’s approval of the spot ETH ETFs was entirely unexpected until a week before the approval. 

Similarly, recent news about the Indian government’s considering to ban cryptocurrency has baffled the community. According to a report from the Hindustan Times, several experts were consulted by the Indian government who suggested that the CBDC (Central Bank Digital Currency) could have more potential than private cryptocurrencies such as Bitcoin and Ethereum. 

Further, they suggested that the Digital rupee, the Indian CBDC can leverage the advantages offered by the other crypto assets. As per sources, the Indian government approached the experts in preparation for its discussion paper which is expected to be published soon. 

One particular anonymous official had stated that CBDCs perform all actions that crypto does, eliminating risks associated with private digital currencies such as Bitcoin and Ethereum. This has caused an unease among Indian community members evading the muddled waters of the Indian crypto regulatory landscape. 

However, the Indian government seemed to have received a positive response to blockchain chain technology. The aforementioned officials have expressed other use cases for blockchain apart from the crypto realm. 

How is the Indian Government’s Approach to Crypto?  

Over the past few months, the Indian government along with the RBI has been exploring its approach towards cryptocurrency regulations. In this attempt, officials announced releasing a discussion paper in September, which has been delayed. 

Moreover, the country recently allotted a 30% tax for digital assets when officials released this year’s financial plans. The country has shown hostility towards private cryptocurrencies in the past years. For instance, one of the largest crypto exchanges, Binance, was banned by the Indian government until recently. 

Moreover, after the ban was lifted, a local state government charged the exchange with GST fees apart from the penalty that Binance paid. 

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