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India Isn't Banning Cryptocurrency After All; Will Make it an Asset Class Instead

A Cabinet note distributed to the Indian government proposes that cryptocurrency be registered as a separate asset class.

A week after a bill introduced by Indian lawmakers raised the possibility of all cryptocurrency being banned, the country is planning to regulate it as an asset class instead.

A Cabinet note distributed to the Indian government states that cryptocurrency will be regulated rather than flat-out banned, local outlet NDTV first reported.

The new bill proposes that all forms of cryptocurrency be registered as a separate asset outside regular currency known as "crypto-assets" and fall under India’s securities regulator Securities and Exchange Board of India (SEBI). 

Benzinga reports that the bill still maintains for cryptocurrency not be accepted for payments made in the country or recognized as legal tender. 

A separate cryptocurrency issued by the country's central bank is already in the works.

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For private foreign cryptocurrencies, the bill would require Indian nationals to declare and transfer their assets to exclusively local cryptocurrency exchanges.

The sector is now meant to be treated as an investment instead of a currency; holding it in a private wallet or foreign exchange would not be allowed.

In a push to ban cryptocurrency outright, Indian President Narendra Modi said last week that it can endanger local youth and pose "serious concerns on macroeconomic and financial stability." 

Some local investors pushed back and, as Goan crypto investor Vidur Chhabra told Al Jazeera, being "at least 10 years behind" and impossible to execute.

Along with India, China is another country that has recently cracked down on cryptocurrencies — the country declared all crypto trading illegal last month. 

On Thursday afternoon, bitcoin's value was down 0.97% at $56,622.70.