According to some press rumours, it seems that India will not follow China’s example and issue a new ban on cryptocurrency-related activities, as it seemed intent on doing.
India and cryptocurrencies, bans and second thoughts
This should resolve a situation that has been dragging on for at least three years, culminating in March 2020 when it seemed that a law could be passed banning not only cryptocurrency-related activities (as in China), but also the possession of them.
But now the wind seems to have turned, and India’s approximately 15 million crypto investors can perhaps breathe a sigh of relief.
On the other hand, the position of the Indian Central Bank has always been against the development of cryptocurrencies, even though they are increasingly popular.
In a late September interview with an Indian newspaper, Finance Minister Nirmala Sitharaman had spoken about cryptocurrencies and the discussions that were taking place in the government about them:
“It’s not a question of literacy or understanding – it’s also a question of to what extent this is a transparent currency; is it going to be a currency available for everyone? El Salvador may be an exceptional place where they tried some experimentation. There are other countries that are talking about the central bank having a legitimate cryptocurrency. That could be a possibility”.
Cryptocurrencies as commodities
According to the first leaked rumours from the Ministry of Finance, the new regulation is expected to treat cryptocurrencies as a financial asset in the same way as commodities.
An official said:
“What should not happen tomorrow is that if I start a personal digital currency, and after good marketing everybody buys it and once it has appreciated, I run away since I am a private player! Everybody has actually bought that currency by using other assets. Government needs to look at regulation in order to avoid the above”.
India loves crypto
India is one of the fastest-growing countries in cryptocurrency investment with numerous start-ups engaged in the business.
Some experts believe that this acceleration of the cryptocurrency regulation project could have a bearing on the recent ban imposed by China.
According to Kapil Rathi, founder of CrossTower, India could have a huge opportunity to benefit from China’s crackdown on the cryptocurrency industry. He stated in this regard:
“China forcing out such innovation and advancement is to India’s benefit, and India should now embrace this new technology with open arms. Crypto can make India a global leader in this new technology”.
Cryptocurrencies and regulation
There have been discussions in many countries for quite some time about how to regulate the crypto world, but so far hardly any country has come up with a precise regulation for cryptocurrencies and related activities.
The United States has recently passed a tax law on cryptocurrency gains and transactions, which are taxed as if they were real estate.
Switzerland and Israel are two of the countries in which cryptocurrencies are already regulated as financial assets and therefore represent two models for the entire crypto world.