Crypto cannot be currency in India, but can be allowed as asset: Indian government

The government of India is drawing up bills to advance legislation of cryptocurrency in India and might categorise it as an asset rather than a currency. Read on to find out more.

Highlights
  • Government of India currently working on drawing up legislation for cryptocurrency in India.
  • It is likely that crypto will be categorised as an asset rather than a currency.
  • The bill will be presented in front of the cabinet in the upcoming winter sessions.

Cryptocurrency has been surfing the grey sides of the law in most countries without any proper definition of legality. This has not only hampered the financial prospects of the form of technology but has also kept the general population in the dark with little to no awareness of the topic. In a bid to clear some water, the government of India has taken up the task to analyse, formulate and execute a structured approach towards cryptocurrency and set a defined bunch of rules and regulations surrounding the same. Initial discussions have indicated that the government is willing to allow cryptocurrency but will be defined as assets instead. 

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Crypto to be regulated as assets in India 

Crypto in India is about to get regularised with a new set of legislation being worked upon that brings in the entire domain under regulations and framework. However, the Indian government is likely to take a different approach when it comes to the legislation of the crypto market in India. Early indications suggest that the commodity will be regulated and branded as an asset rather than a currency. This means consumers will be legally allowed to hold crypto just like one would hold on to gold, property, etc. But any form of the transaction using the exchange of virtual tokens or currency will not be legalised. Thus making crypto an asset rather than a currency in India. 

ET reports via its trusted sources with knowledge on the matter that the government would be ruling out active solicitation including exchanges and platforms. The government is likely to bar the usage of virtual currencies for any sort of exchange or transaction. The source also mentioned that the bill is currently under works and can be taken to the cabinet as soon as in the coming two to three weeks. The Securities and Exchange Board of India (SEBI) could be put on task to be the regulator on the subject however final decisions are pending. 

Also Read: Cryptocurrency: what is cryptocurrency, how it works, and why is crypto market down?

Other agendas regarding cryptos include the prospects of taxation on the commodity and the upcoming legislation that’s aimed to take the floor in the winter sessions at the Parliament will help address that. Discussions which include the presence of Prime Minister Narendra Modi also highlighted the government’s objective to take a neutral middle stance when it comes to decisions being imposed on cryptocurrency. Crypto-industry representatives have been in talks with the government and inputs have from them will help take better decisions regarding the same while the question of banning the new technology will be kept at bay.