India is likely to bar the use of cryptocurrencies for settling transactions or making payments, but allow them to be held as assets like gold, shares or bonds, according to a report in The Economic Times.

Citing sources within the government, the newspaper reported that this approach would avoid a complete shutdown on crypto, though the government was keen to stop crypto companies, including exchange apps and platforms from actively trying to attract new investors. Cryptocurrency in India: Govt Likely to Table Crypto Bill in Parliament to Regulate Digital Currency

The crypto community earlier urged the Indian authorities asking to be classified as an asset rather than as a currency, in order to gain acceptance and avoid a ban.

Last week, Prime Minister Narendra Modi had chaired a meeting to discuss the future of cryptocurrencies amid concerns that unregulated crypto markets could become avenues for money laundering and terror financing.

The government is finalising legislation that will pave the way for regulation of digital asset trading while barring the use of virtual currency for payments and transactions.

The Securities and Exchange Board of India(SEBI) could be designated as the regulator, although a final call is yet to be taken. "Discussions on regulation are going on," the person said.

The Reserve Bank of India (RBI) has so far been hesitant to accept cryptocurrencies, expressing concerns over potential risks to macroeconomic and financial stability, and capital controls. Cryptocurrency in India: Reserve Bank Of India Governor Shaktikanta Das Reiterates His Opposition to Digital Currency

RBI governor Shaktikanta Das earlier said that the number of cryptocurrency accounts in India appears to be highly exaggerated. At a State Bank of India event in Mumbai he said there was need for a deeper discussion on cryptocurrencies and was yet to see well-informed debate on key concerns, some of which had been raised by the RBI.

(The above story first appeared on LatestLY on Nov 17, 2021 03:11 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).