STOCK MARKET BSE NSE

After El Salvador, India may move to classify Bitcoin as an asset class

Top sources tracking the industry told this publication that the government has moved away from its earlier hostile stance towards virtual currencies.

Published: 10th June 2021 02:57 AM  |   Last Updated: 10th June 2021 09:24 PM   |  A+A-

Bitcoin

For representational purposes (File Photo | AFP)

Express News Service

BENGALURU:  After El Salvador’s historic move to adopt Bitcoin as legal tender (rendering it full currency status), things are looking brighter back home in India for crypto-enthusiasts.

Top sources tracking the industry told this publication that the government has moved away from its earlier hostile stance towards virtual currencies and will most likely classify Bitcoin as an asset class in India soon.

Market regulator Securities and Exchange Board of India (SEBI) will  oversee regulations for the cyptocurrency sector after Bitcoin’s classification as an asset class, sources added.

 India’s  crypto industry is also in talks with the finance ministry  regarding the formulation of a new set of regulations and industry sources point out that an expert panel at the ministry is studying the matter.

A Cryptocurrency Regulation bill is likely to be tabled in the Parliament during the Monsoon session, the added.

The development comes days after the Reserve Bank of India (RBI), in a circular, directed banks to stop avoiding transactions involving virtual tokens citing its earlier 2018 circular, since it had been quashed by the Supreme Court.

RBI Governor Shakthikanta Das, however, reiterated that there were still major concerns that have been communicated to the government on digital currencies.

“We can definitely say that the new committee which is working on cryptocurrencies is very optimistic on cryptocurrency regulation and legislation... A new draft proposal will soon be in the Cabinet, which will look into the overall scenario and take the best step forward. We are very hopeful that the government will embrace cryptocurrencies and blockchain technologies,” Ketan Surana, Director and chief financial officer, Coinsbit, and Member, Internet and Mobile Association of India said.

A white paper by Indiatech.org suggests that India’s adoption of Bitcoin as an alternative asset class is more realistic.

Due to the volatile nature of digital currencies (prices fluctuate widely on a daily basis), it pointed, they cannot be regularly used as a payment instrument.

The paper also recommended taxing investments in cryptocurrencies, making them subject to the capital gains tax under the Income Tax Act. 

Hitesh Malviya, blockchain and crypto investment expert, said, “In my opinion, the Indian government will explore a way to regularise Bitcoin. I don’t think India will consider accepting Bitcoin as a legal tender in the near future because it will affect the position of the Indian rupee. Accepting bitcoin as a legal tender is a good idea for those nations who don’t have their own currency or are dependent on the US dollar”.

  • $2 trillion Global crypto market cap.

  • 190% rise in global crypto users in 2018-2020.

  • 200 mn crypto users worldwide.

  • 5,000 digital assets exist globally.

ALSO WATCH | India records world's highest single-day COVID death toll, thanks to Bihar



Comments(1)

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

  • billy.eth

    Interesting developments. It's better to follow countries like Singapore and Australia when it comes to adapting laws to new technologies rather than trying to follow Xi Jinpooh's China.
    11 months ago reply
flipboard facebook twitter whatsapp