The Treasury Department and the Reserve Bank of India (RBI) are developing a regulatory framework to regulate cryptocurrencies. The bill can be passed in February next year.
Last month, the Indian authorities revised their stance on crypto assets, abandoning an outright ban, and began a phased development of a regulatory framework to regulate them.
Compliance with certain industry laws is critical as the popularity of digital assets attracts cybercriminals, according to a statement from the Indian Ministry of Finance. The new rules will allow the authorities to suppress illegal activities using cryptocurrencies.
To develop legislation, the government needs to decide which asset class cryptocurrencies should be classified into. Regulators can classify them as commodities. In this case, cryptocurrencies will be subject to income tax or income tax.
Institutional investors in India are eagerly awaiting the adoption of cryptocurrency regulation legislation that will open up new opportunities for them. Indian entrepreneur and billionaire Nandan Nilekani said:
“It shouldn’t be that I released a cryptocurrency, and after good marketing everyone bought it, it increased in price, and I left for the Bahamas with the investors’ money. Since they bought cryptocurrency with fiat money, the government needs to pay attention to cryptocurrency regulation to avoid this situation. ”
The entrepreneur believes that cryptocurrencies cannot be used as a means of payment due to high volatility and high energy consumption during mining. However, in his opinion, they can replace gold or real estate as a defensive instrument of assets against inflation.
According to a study by BrokerChooser, India surpasses the United States and Russia in the number of cryptocurrency owners. That being said, teen investments are driving the rise in popularity of cryptocurrencies across India. In May 2021, investments reached $ 6.6 billion (49,189 rupees).
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