Sam Reynolds

<div id="highlights-block_619f8361ab0fa" class="highlights">
 <ul>
 <li>A CNN affiliate in India has confirmed that the government isn’t seeking a total crypto ban with its new bill, but rather mechanisms to regulate the asset class as a commodity</li>
 <li>The government is particularly concerned about crypto’s potential role in financing terrorism</li>
 </ul>
 
</div>



On Wednesday, Blockworks reported on language <a href="https://cms.blockworks.co/india-crypto-ban-about-payments-not-the-asset-class/" target="_blank" rel="noreferrer noopener">in a recent bill before India’s parliament</a> that mentioned a ban of all “private cryptocurrency”. Local media in the country have now confirmed with their government sources that the government’s intent is something different. 



According to a local CNN Affiliate in-country, the government intends to regulate crypto and is primarily concerned with its use in the underground economy and terror financing. A wholesale ban is not in the works.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/hashtag/Breaking?src=hash&amp;ref_src=twsrc%5Etfw">#Breaking</a> | <a href="https://twitter.com/hashtag/Exclusive?src=hash&amp;ref_src=twsrc%5Etfw">#Exclusive</a> | Top Government Sources on Cryptocurrency Regulation: There is no ban on <a href="https://twitter.com/hashtag/Crypto?src=hash&amp;ref_src=twsrc%5Etfw">#Crypto</a>. A regulation mechanism will be in place so that it’s not misused. <a href="https://twitter.com/hashtag/CryptoNews?src=hash&amp;ref_src=twsrc%5Etfw">#CryptoNews</a> (Exclusive Input: <a href="https://twitter.com/manojkumargupta?ref_src=twsrc%5Etfw">@manojkumargupta</a>)<a href="https://twitter.com/maryashakil?ref_src=twsrc%5Etfw">@maryashakil</a> shares more details with <a href="https://twitter.com/JamwalNews18?ref_src=twsrc%5Etfw">@JamwalNews18</a> <a href="https://t.co/s8LzFXjNgo">pic.twitter.com/s8LzFXjNgo</a>&mdash; News18 (@CNNnews18) <a href="https://twitter.com/CNNnews18/status/1463364400304345090?ref_src=twsrc%5Etfw">November 24, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



To do this, the government intends to not recognize crypto as tender and put in a comprehensive KYC/AML mechanism at the various fiat gateways in-country.&nbsp;



&#8220;A strict mechanism will be in place so that law enforcement agencies can trace the origin of cryptocurrency used for illegal or anti-national work,&#8221; CNN’s sources said.&nbsp;



Speaking with CNBC’s Squawk Box Asia, Avinash Shekhar, co-CEO of Zebpay, an exchange, said that their initial discussions with the government had “positive vibes.” “There has been lots of positive vibes from the government. We met the finance committee of Parliament around two weeks back,” he told CNBC.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The message or the feelers which we are getting from the government is that they’re looking for some kind of regulation — strict regulation, but not a complete ban.”</blockquote>



Regardless, local traders in India engaged in extensive panic selling, thinking that the ban would be more extensive than initially reported.&nbsp;



On WazirX, an Indian exchange, bitcoin traded at a 15% discount at one point before recovering.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="944" height="574" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png" alt="" class="wp-image-11819" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=944 944w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=423 423w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=429 429w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=360 360w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=80 80w" sizes="auto, (max-width: 944px) 100vw, 944px" /><figcaption>Source: WazirX</figcaption></figure>



Since then, the panic selling has subsided and prices have leveled out.&nbsp;



A <a href="https://www.bloomberg.com/news/articles/2021-11-24/india-is-said-to-mull-allowing-crypto-trading-for-some-investors" target="_blank" rel="noreferrer noopener">report from Bloomberg</a> also said that the government isn’t planning a wholesale ban, but may consider limiting the accessibility of exchanges to accredited investors.



Globally, the price of bitcoin has remained steady at $57,984 down 2.4% over the last 24 hours according to <a href="https://www.coingecko.com/en/coins/bitcoin" target="_blank" rel="noreferrer noopener">CoinGecko</a>.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
<hr class="wp-block-separator">