India will move away from a total ban on cryptocurrencies in favour of regulating them as exchange-traded commodities. By February 2022, the government will present the relevant bill, according to Business Today, citing officials from the Ministry of Finance.
According to the publication’s sources, bringing cryptocurrencies under the legal framework would entail taxing transactions with these assets and the income derived from relevant operations. The Finance Ministry and the Reserve Bank of India (RBI) are currently ‘busy refining the conceptual framework and the necessary rules’.
According to Finder, around 33% of Indians own cryptocurrencies, but there is no legal framework to regulate the market.
At the end of January 2021, media reports emerged that the Indian Parliament planned to consider the government-proposed bill to ban cryptocurrencies.
From April, Indian companies are required to report transactions with digital assets, their volume, as well as advances and deposits from any individuals.
In May, ForkLog reported that the RBI asked banks to discontinue relationships with Bitcoin exchanges. After this, the regulator urged supervised institutions not to refer to the repealed directive banning cryptocurrency operations.
In the same month, the government discussed the creation of a committee that will study the regulation and various uses of blockchain.
In June, Bloomberg sources also said that the government would amend the cryptocurrency ban bill and will consider regulating this class of assets.
Earlier reports indicated that India planned to impose a 2% tax on digital assets purchased on foreign exchanges. Later reports described the possible additional taxation of the foreign platforms themselves.
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