Cryptocurrency and Regulation of Official Digital Currency Bill (2021) envisages prohibiting all private cryptocurrencies in India. It strives to create a framework for creating an official digital currency to be issued by the Reserve Bank of India.
The Cryptocurrency and Regulation of Official Digital Currency Bill (2021) that seeks to regulate the cryptocurrency in the country would be tabled in the upcoming winter session of the Parliament, as per the legislative agenda released on Tuesday evening. The bill seeks to prohibit all private cryptocurrencies in India allowing for certain exceptions to promote the underlying technology and its uses.
As per the legislative agenda, the bill strives to create a framework for the creation of the official digital currency to be issued by the Reserve Bank of India.
Expressing concern over the security of investors’ money in cryptocurrencies investments and transactions, the government on November 15 had indicated that it may not ban the digital currency but may bring in a regulation soon. A Parliamentary Standing Committee on Finance and cryptocurrency industry members chaired by Member of Parliament Jayant Sinha met with various crypto-market entities to discuss the way forward early in November. "Crypto cannot be stopped but must be regulated," government officials said at a meeting with cryptocurrency stakeholders, according to a person close to the development, who spoke to Outlook Money.
In an interview to news agency PTI, Revenue Secretary Tarun Bajaj had said that the government would be considering changes in the income tax laws to bring cryptocurrencies under the tax net. These changes could be part of the annual budget for the next financial year.
He added that some people were already paying capital gains tax on the income derived from trading in cryptocurrencies. As for GST, he stated that laws were very clear. The rate of taxation would be applicable as those in the case of other services.
As per the Revenue Secretary, the government would be taking resort to existing norms to categorise facilitators, brokerages and trading platforms and the modus operandi of taxation from existing platforms involving similar services. He said that whatever GST rates were applicable on them, would be extended to cryptocurrency trading as well.
Prime Minister Modi in a televised address on November 13 he emphasised that attempts to mislead youth via non-transparent and enticing advertisements had to stop. He added that the unregulated asset cannot be permitted to become an avenue for money laundering and terror financing. While addressing the Sydney Dialogue on November 18 he had urged democratic nations to work together and prevent the misuse of technological innovation like cryptocurrency.
Reserve Bank of India Governor Shaktikanta Das echoed similar concerns. He said that the cryptocurrency market is a matter of serious concern to the central bank from the perspective of macroeconomic and financial stability. "With reasonable confidence, I can say, the number of participants (in the cryptocurrency market) seems exaggerated. The bulk of investors have invested Rs 1000, Rs 2000 or Rs 3,000. Perhaps, there is an attempt to enrol as many people as possible," the governor was quoted as saying.