- India looks set to regulate crypto trading, rather than slap an outright ban on digital currencies as feared.
- People should declare their crypto assets and put them on an exchange, the government suggested, according to an NDTV report.
- The market regulator should then oversee those exchanges, with prison time and fines for violations, it said.
Crypto fans in India can breathe a bit easier, as the country's government looks ready to bring in regulation on trading, rather than impose an outright ban on digital currencies, as many had initially feared.
Lawmakers in India's lower house last week introduced a bill to prohibit "all private cryptocurrencies" in the country, except for some tokens with useful underlying technology.
Bitcoin prices slid on local exchanges, as crypto holders faced the prospect of their holdings becoming outlawed.
The note said the proposed law should refer to "crypto assets" and not "cryptocurrencies," NDTV reported, citing sources, on Thursday.
There will be a deadline for people to declare their crypto assets and put them on existing exchange platforms, it said.
Those crypto exchanges should be overseen by the market regulator, the Securities and Exchange Board of India, it said.
The government suggested any violation of the rules could be punished with prison terms of up to 18 months, or by fines imposed by the SEBI. The penalties could reach as high as 20 crore rupees, equivalent to about $2.6 million dollars.
As lawmakers hammer out India's regulatory approach to cryptocurrencies, its central bank is planning to test a "digital rupee" in the next few months. That central bank digital currency, or CBDC, won't be covered by the proposed measures, according to NDTV.
The cabinet note quashed any hope that a private cryptocurrency will be recognized as legal tender in India.