India considers new committee on digital currency regulation

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The government of India is reported to be considering setting up a committee of experts to consider whether there could be scope for formal regulation of digital currency in the country, in a move that could signal a change of approach towards the sector.

According to reports in The Economic Times, which attributed “three sources privy of the discussions,” the government is in the early stages of establishing a panel of experts to review the matter, though has yet to formally commit to plans.

The committee would look at possibilities for regulating digital currency as a form of digital asset, rather than as a form of currency, mirroring the views put forward by some of the country’s leading cryptocurrency exchanges to date.

An earlier committee set up to look at the matter, chaired by ex-finance minister Subhash Chandra Garg, recommended an outright ban on digital currency back in 2019. However, with their report now considered out of date, authorities in India are reported to be considering taking a fresh look at their approach.

“There is a view within the government that the recommendations made by the Subhash Garg [committee] are dated and a fresh look is needed at use of cryptos rather than a total ban.”

Junior Finance Minister Anurag Thakur is being lined up for a role on the new committee according to reports, and has been liaising with representatives from the banking and digital currency sectors on the matter.

The proposals would mark a significant change of direction for the authorities in India, with the Reserve Bank of India previously issuing a ban on digital currencies, which was more recently overturned by the Supreme Court.

It comes as the government is preparing to reexamine plans for its digital currency bill, which had originally been slated for discussion in March, before being postponed for unknown reasons. The bill is now expected to return before lawmakers during the July session of India’s parliament.

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