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India is reportedly planning to classify Bitcoin as a commodity, the Financial Times reported Monday, a move that would allow it to be taxed, but which critics say could end the country’s opportunity to become a leading hub for the cryptocurrency industry. This update is in complete contrast to the India bitcoin ban saga – ongoing for the last couple of years.
A recent report suggests that the Indian government is in the process of establishing a legal definition for cryptocurrency, which will include asset classification and a possible ban on exchanges (though these reports have not been officially confirmed). All of this could have a huge impact on the industry, but which way will India ultimately go?
India Bitcoin Ban – Government focus shifted to asset reclassification
India may have finally reached a turning point when it comes to cryptocurrencies, now that the government has reportedly adopted a more lenient stance towards them.
According to a report in Thursday’s New Indian Express, the government’s hostility towards bitcoin (BTC) appears to be shifting towards a more reasonable regulatory policy for cryptocurrencies. According to sources cited by the publication, authorities have abandoned previous plans to ban bitcoin entirely in favor of classifying cryptocurrencies as an alternative asset class.
The Securities and Exchange Board of India would be responsible for overseeing the regulation of cryptocurrencies in the country, along with the finance ministry. These inside sources also claim that Parliament will debate a comprehensive bill to regulate cryptocurrencies during the monsoon session that begins in July. A panel set up by the finance ministry is reportedly studying protocols for regulating cryptocurrencies, and the findings could be included in parliamentary proceedings next month.
Commenting on the emerging positive signals on cryptocurrency regulation, Ketan Surana of the Internet and Mobile Association of India said: We can say without a doubt that the new commission dealing with cryptocurrencies is very optimistic about the regulation and legislation of cryptocurrencies. Last May, Indiatech.org, an Indian technology lobby group, called on the government to define cryptocurrencies as digital assets rather than currencies.
Meanwhile, the Reserve Bank of India remains an outspoken critic of cryptocurrencies, with the central bank recently stating that its stance on cryptocurrencies remains unchanged. However, the RBI has distanced itself from reports that it has ordered banks to block exchange services for cryptocurrencies. Indeed, in March 2020, the Indian Supreme Court overturned the RBI’s 2018 ban on banks operating cryptocurrency exchanges. As
As reported earlier, three major cryptocurrency exchanges – Kraken, Bitfinex, and KuCoin – are looking to enter the Indian market.
According to Reuters, the Indian government is planning to modify its stance on cryptocurrency trading instead of a complete ban. The news agency cites “two people familiar with the matter” as saying that the Indian government will instead regulate the market to prevent illicit activities such as money laundering.
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