Kolkata: The days of ambiguity over crypto assets could finally end in India with reports suggesting that a discussion paper could be floated in June that could provide an idea of an emerging policy framework of this asset class. There are indications that the discussion paper could draw elements from the synthesis paper prepared by the International Monetary Fund and the Financial Stability Board. Needless to say, the paper will be circulated to pave the way for an extensive stakeholder discussion.
India’s position on cryptocurrency is at best ambiguous. In the FY23 budget, finance minister Nirmala Sitharaman announced that the government will levy 30% tax on any capital gains in virtual digital assets. But it was also simultaneously made clear that the revenue measure did not automatically grant legal validity to the world of cryptocurrency. The government has also instructed the crypto exchanges working in India to register with the Financial Intelligence Unit.
RBI was opposed
The banking regulator Reserve Bank of India has always maintained suspicion about this category of assets. It has maintained that there lies an opportunity for the possible misuse of cryptocurrency and that it could be used for terror funding and even money laundering. RBI has also advocated introduction of Central Bank Digital Currency, which it could launch.
Incidentally, Andhra Pradesh chief minister N Chandrababu Naidu has said that he has suggested to Prime Minister Narendra Modi to introduce digital currency in order to curb flow of cash in society. He emphasised that the world is moving towards digital currency and India must move in the same direction. Naidu was part of the NITI Aayog Committee of chief ministers who are supposed to draw up an action plan for a quick transition to a cashless economy.
Voice for crypto
A corporate captain who, on May 29, advocated steps towards crypto currency is Bharti Group chairman Sunil Mittal. “Look at the case with crypto now. Crypto, in the last six to eight, 10 weeks has started to move at a pace which has never been seen before, when the Trump administration has been supporting cryptocurrencies… So far, the position was no… crypto will not be allowed. We will probably try our own digital currency. But I think with the US moving so fast, you need to have strong regulations, policies, look at what’s going on in the world, and then look at and see what impact it has,” Mittal has said.
Incidentally, US President Donald Trump has been a champion of crypto currency who vowed last year to turn US into a crypto powerhouse of the world. While the Joe Biden administration was not favourably disposed to cryptocurrency, Trump has turned that policy right on its head and has said that he will introduced pro-crypto legislation. There is already a strategic bitcoin reserve in the US.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, any form of alternative investment instruments and crypto assets.)
India’s position on crypto assets is yet unclear. The government has imposed 30% tax on gains made from tis asset class but has not said that it has got legal validity in India and the Reserve Bank of India views crypto assets with great suspicion. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
