India has warmed to the idea of cryptocurrencies faster than many countries. More than 100 million investors are estimated to be joining the crypto club in India. Several research reports claim that India has the largest number of crypto investors in the world. In light of increasing investment in cryptocurrencies, the government has been considering for some time whether to regulate its mining and trading. Despite initial rumors that a complete ban on cryptocurrencies in India is being discussed, signals from official quarters, including the country’s central bank, have been largely positive.
There was a buzz about the crypto sector in India in 2018 after the Reserve Bank of India (RBI) banned crypto transactions facilitated by other lenders. At that time, the RBI had stated that the irregular and untraceable nature of cryptocurrency This poses a serious risk to the financial functioning of the country.
Later in 2021, the RBI lifted this restriction in support of the Supreme Court’s decision which was not in favor of anyone. Tightening the grip On crypto activities.
In order to continue the crypto activities, the Ministry of Finance was tasked to prepare a bill list idea to regulate the activities related to cryptocurrency in the country. The process is being administered by the Finance Minister Nirmala Sitharaman Self.
The year 2021 was expected to bring concrete legislation regarding this digital finance sector, but plans kept getting delayed and no conclusions came to fruition. Here is a timeline on what has happened around India’s much-awaited crypto bill, which is expected to be introduced in the upcoming budget session of Parliament.
September 2021: talks between authorities about taxing crypto income
The crypto bill did not figure in the list of announcements in the monsoon session of Parliament last year as work on it was not completed at that time. Later in September 2021, the Ministry of Finance formed a new committee to analyze whether trading cryptocurrencies could generate income. taxed They would need to be classified as capital gains or under a newly created tax category.
The panel was allotted a period of four weeks to submit its analysis to the finance ministry, the details of which have remained unknown in the public domain.
November 15, 2021: Government invites industry experts to discuss crypto market
Ahead of the winter session of Parliament last year, the Parliamentary Standing Committee on Finance invited top crypto stakeholders meeting,
The agenda for this meeting, to be held on November 15, 2021, was listed as “Cryptofinance: Opportunities and Challenges” and was attended by representatives from several crypto-based companies including Coinswitch Kuber, CoinDCX, WazirX, and the Crypto Assets Council (BACC). was asked. To be a part of it.
Details about what happened during this meeting also remained a secret.
November 24, 2021: Crypto Bill Listed on Parliamentary Agenda Crashing Price Chart
On 24 November, the crypto market plunged following the emergence of India’s possible plans to ban the region. official agenda To be presented before Parliament.
The bill proposes a ban on the operation of all “private cryptocurrencies” in the country. At the time, no explanation was given as to which crypto assets were being classified as private. By definition, these were meant to be cryptocurrencies backed by private blockchains that allowed users to transact without making the data public. a report good Monero, Particle, Dash and Zcash were named by CNBC as examples of private cryptocurrencies. Popular crypto coins including bitcoin and ether were classified under public cryptocurrencies
The agenda also states that the government wants to bring an official digital currency for India. The development took place five days before the start of the winter session of Parliament on November 29.
November 30, 2021: Nirmala Sitharaman gives new update on crypto bill
Answering several questions in the Rajya Sabha, Union Finance Minister Nirmala Sitaram said that the crypto bill will come in the house. cabinet clears it up. Sitharaman also said that the government is cautioning people that cryptocurrencies are a “high risk” sector.
Without disclosing further details, the Finance Minister said that the Bill did not do proposal for legalization Bitcoin As a legal tender in India like a Central American country El Salvador Done in September 2021.
December 7, 2021: More details revealed about the crypto bill
according to a Reuters In the report, the crypto bill referred to “general restrictions on all activity on mining, production, holding, sale, (or) transactions by any person” in digital currencies as “a medium of exchange, store of value and a unit of account”. suggested.
Violation of any of these rules would be “cognizable,” the bill summary reportedly reviewed by Reuters. This essentially meant that violators could be arrested on a “non-bailable” charge.
December 23, 2021: Winter session of Parliament ends with no word on crypto bill
Awaiting approval from the cabinet, the crypto bill did not make it to the parliamentary table last year at all. Citing sources, media report The time said the government was gathering information about how other countries plan to regulate cryptocurrencies before making a final decision.
Crypto Laws in India: Where Things Stand Currently
On February 1, the Finance Minister will present the Union Budget for the year 2021-2022. Crypto bills may or may not be generated for addressable topics.
The need to bring the cryptocurrency sector under government control is due to several reasons. Crypto transactions go undetected and the potential for exploitation for illegal activities such as terror funding and the disruptive high energy requirements of crypto mining are some of them. This is why governments around the world are concerned about crypto regulations.
Time and again, Prime Minister Narendra Modi has also asked countries to unite same mindset To deal with crypto-related concerns.
Meanwhile, the region is witnessing expansion and adoption in India. Not only cryptocurrencies, but other blockchain-based sectors such as NFTs and metaverse Continue to generate interest among Indians.
Cryptocurrency is an unregulated digital currency, is not legal tender and is subject to market risks. The information in this article is not intended to be financial advice, business advice or any kind of advice or recommendation given or endorsed by NDTV. NDTV shall not be liable for any loss arising out of any investment based on any alleged recommendation, forecast or any other information contained in the article.