India is not going to put a blanket ban on digital currencies, but rather treat them as commodities, an anonymous source in the government told news outlet Quartz July 11.
According to Quartz, a Finance Ministry panel has ordered a study on cryptocurrencies, which may suggest that the government would treat them as commodities. A senior government official with knowledge of the panel’s discussion told Quartz that they doubt the government aims to ban cryptocurrencies.
The source said that regulators’ main concern is how to effectively regulate the trade and identify “where the money is coming from.” They added that, “allowing it as a commodity may let us better regulate trade and so that is being looked at.”
The official told Quartz that the committee is mostly concerned about tracking investors and funds in order to fight money laundering and illicit financing:
“Trade is not a criminal offence. Most of us trade in various asset classes in the stock market. So how is this [cryptocurrency trading] any different? What has to be in place is a mechanism to be sure that the money used is not illegal money, and to track its source is the most important thing.”