In a groundbreaking move, India’s Parliament Home Affairs Committee has recommended regulating cryptocurrencies instead of banning them. This marks a major shift in the country’s approach toward digital assets and could reshape the Indian crypto landscape.
Why Regulation is Needed
The committee highlighted concerns linking crypto to illegal activities:
Scams, money laundering, and dark web transactions
₹31,594 crore in fraud losses reported between 2019–2024
Over 53.9 lakh complaints filed
These alarming figures underline the need for a structured framework to protect investors while fostering innovation.
Key Recommendations by the Committee
Rather than a ban, the committee suggests a balanced approach:
Classify Crypto as Digital Assets – Cryptocurrencies should fall under the purview of the Foreign Exchange Management Act (FEMA).
Strengthen Exchange Oversight – All exchanges must comply with AML/KYC and FATF regulations.
RBI Supervision for Stablecoins – Stablecoins should only operate under Reserve Bank of India approval.
Clear Tax & Legal Framework – Establish well-defined rules for taxation and legality to boost investor confidence.
What This Means for India
This move signals that India is leaning toward regulation over prohibition. By embracing a clear legal framework, the country can foster a safer environment for crypto trading and innovation, while curbing fraud and misuse.
For the Indian crypto community, this is a monumental step toward mainstream adoption. Investors, exchanges, and innovators can now anticipate clearer rules and oversight, reducing uncertainty and encouraging growth in the digital assets sector.
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