Our observations
It makes much more sense for India to regulate cryptocurrencies as commodities rather than banning them outright as was suggested earlier. Many other countries, including Malaysia, have already classified cryptocurrencies as commodities.
This is the first time some clear indication of what India plans to do is being communicated by a lawmaker from the the Indian ruling party. This augurs well for India which has been in the news for seesawing on its crypto standing.
The reason cited by the lawmaker for a constrained approach to regulations which is very different from other developed nations is that India doesn't have full capital account convertibility. Full capital account convertibility is considered to be one of the main features of a developed economy. Given that and given India wants to become a developed economy, it is only a matter of time before India would have to have full capital account convertibility.
He also added that their crypto legislation would take into account India's national security concerns. This is a valid reason since India does have serious national security concerns predicated by its historical animosity with Pakistan and now with China taking a belligerent stand in the region posing a threat to not only India but many others as well.
Photo by Hassan OUAJBIR on Unsplash
Finally we can see some light at the end of the tunnel.
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