Crypto should be treated and regulated as a separate asset class to enable governments to effectively deal with illegal activities associated with virtual currencies, former Reserve Bank of India (RBI) deputy governor R Gandhi said.

 Crypto cannot be a currency as it is not a legal tender. Many policymakers view it as an asset, not as a currency, not as a payment instrument and not as a financial instrument as there is no clear identified issuer, he said.

"So once we have an understanding and acceptance, that it is an asset (not a currency), then it becomes relatively little easier to have regulation around it," he said at the inaugural session of India’s first crypto-asset conference, HODL–2021, organised by Internet and Mobile Association of India (IAMAI) and Blockchain & Crypto Assets Council (BACC).

Once it has been termed as an asset or as a commodity, it can be used for payments towards economic activities.  

There is a possibility of misusing this virtual asset for criminal activity in absence of regulation. So, he said, any jurisdiction should have a clear framework by which any part of the economic activity should not be seen as supportive of any criminal activity.