Cryptocurrency still remains beyond any regulation in the country; however, government authorities have started promoting transparency regarding crypto transactions
Indian investors are waiting in anticipation for the official verdict on cryptocurrency exchanges in the country. Even though El Salvador has embraced the digital revolution in currency, India is still mulling over the issue. Last week, Jayant Singh, Chairman of the Parliamentary Standing Committee on Finance, said in an online event that the Indian government would take a “distinctive approach” to regulate cryptocurrencies in India. The statement came at a time when cryptocurrency is still unregulated in the country. India has a strong base of cryptocurrency investors and exchanges. But investors are still in the dark about the future of cryptocurrency.
Is Cryptocurrency Illegal In India?
Currently, bitcoins and other cryptocurrencies are beyond the purview of legal regulation in India. We cannot call them illegal because they are not yet authorised for use by any central authority in the country. Cryptocurrency remains outside the scope of any guidelines, regulations, or rules. This makes Bitcoin and altcoin transactions riskier because disputes arising from these exchanges will not be legally bound.
Though India hasn’t yet imposed regulations on cryptocurrency transactions, it has asked for transparency in all such undertakings. In April, amendments were introduced in the Companies Act for this purpose. Owing to this transparency, digital asset and the gains thereof are likely to be counted as a capital asset, which is bound by taxes under capital gains. But companies are not yet sure how to treat the different types of gains and income in this regard.
The Cryptocurrency Bill is speculated to be tabled during the Parliament’s winter session this year. Its aim is to define and classify cryptocurrency according to the technology involved. An inter-ministerial panel on cryptocurrency recently suggested that cryptocurrencies be treated as digital assets and not currency. There are also speculations that government-enforced crypto coins may become the norm.
What If India Bans Cryptocurrency?
A ban on cryptocurrency in India would mean you won’t be able to convert local fiat currency to buy cryptocurrency or liquidate HODL-ed cryptocurrencies into cash. Crypto exchanges will also stop. The ban would ensure that the HODL-ed cryptocurrency stays on HODL until the restriction is lifted.