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Cryptocurrency to be Treated as commodities in India, Ban may not be Imposed

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An anonymous source reported news outlet Quartz July 11, that India may not impose a blanket ban on cryptocurrency but treat it as commodities
The Finance Ministry has set up a panel on cryptocurrency which may advise the government to treat digital currency as commodities, according to Quartz. An eminent member of the panel told Quartz that the possibility of blanket ban is being ruled out
Effective regulation and tracking of money are on the agenda and the main concern for the government. They added that “allowing it as a commodity may let us better regulate trade and so that is being looked at.”
The most pressing concern to the committee is about tracking the investors as a way to curtail money laundering and illegal financing, an official told Quartz
“Trade is not a criminal offense. 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.”
According to Quartz, former Reserve Bank of India(RBI) deputy governor R Gandhi opined that treating cryptocurrencies as commodities would clearly demonstrate to investors that crypto is not real currency:

“If these are used to settle transactions, then it acquires the nature of currency. So that is one thing that one needs to be wary of. But if people want to invest in a commodity then that is different, because then we can assume that they are aware of the risks involved.”

In May, the RBI had asserted that it will not allow RBI regulated bodies to deal in cryptocurrency thus eliminating services to any individual or organizations, Though the bank stated that it may come up with its own cryptocurrency in future. In January the Indian Finance Ministry criticized Bitcoin (BTC) and other digital currencies for their lack of intrinsic value. The Indian Finance Ministry said there is “a real and heightened risk of investment bubble of the type seen in Ponzi schemes, which can result in sudden and prolonged crash exposing investors.”

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