Over the past few years, the South Asian market has become increasingly important for cryptocurrencies. This is due to a number of reasons, including the fact that this region is home to more than a billion potential consumers. As a result, the adoption of digital currencies in this region has been increasing slowly but steadily. However, limited progress has been made in terms of defining clear regulations.
This blog looks at the current state of regulatory affairs in the South Asia region.
Brief History
Within the South Asian region, countries have been deliberating whether to regulate cryptocurrencies for a long time. For example, in India, the central bank decided to ban cryptocurrencies as early as 2018. However, the country’s Supreme Court reversed this order in March 2020, and cryptocurrencies became legal again. There has been a lot of deliberation on this topic since then, with little actual outcome.
Similarly, Bangladesh has also adopted an aggressive approach towards cryptocurrencies. In 2017, the country’s central bank said that cryptocurrencies were illegal. It was argued that the use of cryptocurrencies violates the basic laws against money laundering and terrorist financing. However, this stance was changed during 2020, when Bangladesh indicated that it was willing to adopt blockchain transactions due to the perceived benefits.
Current Status
At present, both India and Bangladesh are looking to find ways to regulate cryptocurrencies without banning them completely. The Indian parliament is expected to discuss a new bill regarding digital assets in the next few weeks. It is expected that the Indian government will also announce some form of regulation. Until the new bill is discussed, cryptocurrencies in India remain legal.
Similarly, Bangladesh is yet to finalise its stance on cryptocurrencies. In July 2021, the Bank of Bangladesh released a letter stating that the use and trade of cryptocurrencies in the country was not illegal. The President of the Bangladesh Association of Software and Information Services (BASIS) has also stated that cryptocurrencies are the future and should not be banned.
Future Outlook
The next few months could prove to be crucial for crypto in South Asia. Countries like India and Bangladesh will likely come up with clear regulations governing the use of cryptocurrencies. At the moment, it is looking like both nations will not ban cryptos but will choose to introduce stringent regulations governing their ownership, transfer, as well as reporting.
Still deciding, but decisions needed soon
It is evident that the South Asian region has yet to decide on regulating crypto. This situation is expected to change very soon. Until then, the use of cryptos in this region continues to be legal. Trends indicate that trading in cryptocurrencies continues to remain popular in South Asia.
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