The planned crypto bill in India, which has yet to be filed in Parliament, may not seek to outlaw cryptocurrencies. Yet, according to the Economic Times, exchange-to-exchange transactions are likely to be restricted. As per the Indian magazine, insiders believe there would be a blanket prohibition on bourse trade, limits on wallets that conceal the owner’s identification, and the barring of Google Chrome extensions that enable users to move more than 4,000 cryptos. The Government of India may also consider creating a universal wallet, similar to a Demat account, to monitor retail crypto transactions.
Crypto exchanges will be required to submit the government with quarterly statements.
According to sources, the government is considering a method that will monitor all inflows and outflows of the Indian rupee on Indian crypto exchanges, and only these exchanges will be permitted to operate within the nation. This might imply that the exchanges open their ledgers to the government on a quarterly basis.
The goal, according to reports, is to elevate cryptocurrency exchanges to the same level as major stock or commodities exchanges in the nation. Also, prevent cryptocurrency transactions from circumventing the Foreign Exchange Regulation Act (FEMA).
This is after NDTV reported that the Securities and Exchange Board of India (SEBI) may be called in to oversee the cryptocurrency business. The same statement said that Indian investors will not be permitted to store their assets on overseas crypto exchanges or private wallets.
When the bill becomes law, these people will apparently be given time to make the necessary modifications. Failure to do so might result in fines ranging from 5 crores to 20 crores.
India may develop its very own local cryptocurrency wallet
According to the Economic Times, because the government would ban the operation of private wallets, India may construct a standard wallet similar to a Demat account for crypto commerce.
El Salvador created a national cryptocurrency wallet called El Chivo earlier this year. Unlike India’s proposal, however, the wallet was created to aid in the acceptance of Bitcoin as legal cash. India, on the other hand, has no intentions to do so. Sitharaman, the Indian Finance Minister, has previously said in Parliament that India has no intentions to award Bitcoin currency status.
Having said that, El Chivo addresses the same challenge that India is attempting to solve: the establishment of a closed-loop system in which crypto transactions may only take place within the specified system.
While it may be an appealing notion for the administration, advocates of the crypto universe say that it contradicts the goal of interoperability, thereby limiting expansion.