India is set to propose a new bill in parliament, and investors are trying to make sense of what this might mean for the future of virtual coins in South Asia.
A top executive at one of India's largestcryptocurrencies exchanges said that lawmakers may decide to impose tough regulations on the market instead of banning private coins.
The co-CEO of Zebpay believes that the company will have some kind of coherent regulation, but on the tougher side.
The government plans to introduce a bill to regulate digital currencies when the Parliament begins its winter session on Monday, according to a parliamentary bulletin.
India wants to ban most private cryptocurrencies as well as establish a framework for creating an official digital currency to be issued by the Reserve Bank of India. The bulletin said that it will allow for certain exceptions to promote the underlying technology of cryptocurrencies.
The feelers we are getting from the government are that they want some kind of regulation, but not a complete ban.
A pilot of a digital Indian rupee is being considered by the central bank.
Shekhar told CNBC that in the last eight to nine months, the government's stance on cryptocurrencies changed after officials consulted with various stakeholders.
There has been a lot of positive vibes from the government. He said that they met the finance committee of Parliament. The government is telling us that they want strict regulation, but not a complete ban.
A senior government official said in March that India was considering a law that would ban cryptocurrencies, fine anyone trading in the country or even hold such digital assets.
The news agency says that New Delhi has changed its stance and is now trying to discourage trading by imposing hefty capital gains and other taxes.
Prime Minister Narendra Modi spoke at the Australian Strategic Policy Institute about the importance of working together to make sure that the digital currency is not in the wrong hands.
Finance Minister Sitharaman was asked by the Hindustan Times if India should have its own currency.
Shekhar said that officials want to control this and don't want it to become a currency.
While there is no official data available, media reports suggest there are about 15 million to 20 million investors in India.
Shekhar said that innovation in the technology is not being talked about enough.
Billions of dollar companies will be created in India with regulation coming in, he said.
