While the government is unlikely to ban cryptocurrencies, it may take a cautious approach towards such investments, permitting them as assets instead of currencies, reported The Economic Times on Wednesday.
The Centre may not permit use of crypto as currency to perform transactions but may allow people to hold it like an asset -- similar to shares, gold or bonds, said the ET report, citing people with knowledge of the matter.
According to the sources mentioned in the report, the government may also not allow active solicitation by companies including crypto exchanges and platforms.
Speculations have been doing rounds over the inputs likely to be included while drafting the legislation for cryptocurrency. On Saturday, Prime Minister Narendra Modi led a review meeting on cryptocurrency. However, the PMO didn't share any details regarding the meeting.
This was followed by a Parliamentary Standing Committee on Finance meeting -- led by BJP MP and former Union minister Jayant Sinha -- with industry associations and experts on cryptocurrency.
In both the high-level meetings, as per reports, there was a consensus that cryptocurrency won't be banned but regulated.
In the next two or three weeks, a draft of the legislation is likely to be presented before the cabinet for consideration, as per the ET report.
Market experts have been demanding regulation of crypto for quite some time now as they fear an unregulated environment with several platforms indulging in over-promising and non-transparent advertisements may mislead investors and result in massive losses.