That would be the usual lazy and no-research based response on how to build a regulatory framework for Cryptocurrencies. If China can formulate a regulatory policy and so can Japan or Germany and legalize its usage, then I don't see what's causing the delays in sharing a draft of a regulatory framework by the "body" that was formualted to investigate on how this could be achieved. Also before I begin explaining how regulations can be imposed, it's fun to note how the Official mentions Bitcoin being hard to regulate, but insists on banning it without realizing it's even harder to ban a decentralized crypto. If exchanges shutdown, then investors who can, will find avenues to trade internationally and with secrecy.
“Let us accept that it would not be possible to regulate it effectively. Because they will do transactions from their houses. You cannot enter every home to check what transactions are going on. So, I think this is a serious challenge, and this should not be allowed at all.”
This statement alone signifies the lack of research. To track transactions, they could build bodies and a system in the Banks to associate users Bank account transactions with Indian exchanges and to trace payments made into international exchanges through credit cards (There are banks that can already do this and are). This should help curb money laundering if that's their worry.
Also, it'd make sense to formulate taxation policies (I believe the IT department is already setting the ground rules for crytoassets taxation as they've collected investors information and notified HNI's of their tax duties for such investments).
