- Indian government plans to present cryptocurrency bill in this month's parliamentary session
- Not looking to ban digital assets; might only allow pre-approved cryptocurrencies to be traded on exchanges.
- A pre-verification approach may create challenges for thousands of peer-to-peer exchanges in the country.
India wants to tighten regulation around cryptocurrencies by only allowing certain digital assets to be traded on crypto exchanges. A source familiar with the matter told Reuters that this process is currently under discussion and that the government plans to introduce and pass a law for the new asset class in the parliamentary session this month.
India to present new cryptocurrency bill
During the parliament’s winter session, the Indian government will present a new cryptocurrency regulation bill that will ban the use of digital assets as payment but will allow the trading of crypto as assets.
Government agencies, including the Reserve Bank of India (RBI) were in discussion with representatives of the cryptocurrency industry earlier this week. The country previously considered banning the issuance, mining and possession of digital assets. The Indian government has softened its stance on crypto since. It is unlikely to follow an earlier plan to ban private cryptocurrencies and is now looking to allow the trading of pre-approved digital assets on crypto exchanges. However, sources close to the matter stated that this could be a cumbersome process.
The sources further stated that the government is likely only to allow pre-approved coins to be traded, while holding or trading unapproved digital assets may result in a penalty. The new approach to regulating cryptocurrencies puts forth a challenge to thousands of peer-to-peer exchanges.
The sources added that hefty capital gains and other taxes might be imposed on crypto investors in the country to discourage digital asset trading. Investors may also be required to pay over 40% on any crypto earnings, in addition to any goods and services sales taxes and securities transaction taxes.
India’s Prime Minister Narendra Modi recently said that digital assets must not fall into the "wrong hands and spoil our youth" and further urged all democratic nations to work together to ensure that such events do not happen.
The Prime Minister further warned that unregulated cryptocurrency markets could be used for money laundering and terror financing purposes.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.