India Will Introduce Crypto Regulations In Upcoming Budget Session in February 2022
India is most likely not going to ban digital assets but rather introduce regulations around it. The government of India is proposing to present cryptocurrency regulation in the next general budget, which tentatively will be held in February 2022.
The Budget 2022-23 is expected to be presented on Feb. 1 during the first half of the parliament’s Budget session, which usually begins in the last week of January.
The Government of India (GOI) will possibly regulate cryptocurrencies similarly to commodities. They will be categorized as an asset class and apply fair taxation on gains and transactions. Earlier, this June the GOI announced that the Securities and Exchange Board of India (SEBI) would supervise regulations for the cryptocurrency market after it is classified as an asset class.
According to Business Today, the finance ministry and the Reserve Bank of India (RBI) officials are currently engaged in “fine-tuning the conceptual framework and the necessary regulations.”
In July 2019, the government had considered a bill titled “Banning of Cryptocurrency & Regulation of Official Digital Currency”, which aimed to ban all crypto. A joint ministerial committee led by the previous finance secretary Mr Subhash Chandra Garg, drafted this bill.
Nevertheless, according to sources, instead of outlawing bitcoin and other cryptocurrencies, the government will probably regulate crypto assets as commodities.
The central bank lately conveyed “serious concerns” about cryptocurrency. RBI Governor Shaktikanta Das was quoted as saying, “The government will take a decision. I think we need more credible answers as to whether going forward with the whole private cryptocurrencies, what contribution will it bring to Indian economy.”
On March 21, India’s finance minister Ms. Nirmala Sitharaman stated that the cabinet's notes on crypto were on the verge of conclusion. “While we are very clear that the RBI may take a call on official cryptocurrency, but from our side we are very clear, we are not shutting all options off. We will allow a certain amount of windows for people to use so that the experiments in blockchain, Bitcoin will have that window available.”
India has been playing flip-flop with crypto regulations for quite a while but Indian investors have been aggressively investing in crypto. Subhash Chandra Garg, former finance secretary of India said: “The RBI (Reserve Bank of India) and the government will have to figure out how to allow the use of private cryptocurrencies on the crypto platforms which have their own system of value transfer”.