India may set up a panel to study regulation of the crypto market, rather than banning it, report says

• India's government could set up a panel to look into crypto regulation, the Economic Times reported.
• Earlier this year, talks of a full ban were rife as parliament was set to discuss new crypto laws.
• Despite the looming threat of a ban, crypto has been surging in popularity in India.

India may set up a panel to look into regulating the crypto market rather than outright banning it, the Economic Times reported on Wednesday, citing three sources close to the matter.

A full ban on crypto, as suggested in 2019 by former finance secretary Subhash Garg, was widely perceived as outdated according to the report. The panel might study ways in which blockchain technology could support the country, find ways to regulate crypto as an asset class rather than a currency, and even look into a digital rupee in collaboration with the Reserve Bank of India.

No concrete decisions have been taken yet, according to the report.

Earlier this year, talks of a full ban on crypto were rife in the country. A bill banning crypto trading and the owning of crypto assets was meant to be discussed in parliament in March as government officials were apparently concerned about crypto being used for illegal activities. The debate around the bill was however postponed for unknown reasons, the Economic Times report said.

Just last week, it was reported that India's central bank was urging lenders to stop dealing with crypto exchanges and traders.

Despite the regulatory uncertainty and the looming ban, crypto has been surging in popularity in India. The country was listed in eleventh place for crypto adoption in Chainanalysis' 2020 report on cryptocurrencies.

Major players in the crypto industry have also entered the Indian market with Binance acquiring India's biggest crypto exchange, WazirX, and Coinbase announcing earlier this year that it would expand into the country.