New crypto rules in India - Does any of them make sense?

News has been making rounds that India might tighten crypto trading by imposing some set of rules, however, there will not be an outright ban in the country. Digital asset trading includes the buying and selling of cryptocurrencies which has attracted many investors – with this, the government’s point of view has changed considerably in recent years.

What is the Indian Government’s take on cryptocurrencies?

Companies specializing in Cryptocurrency exchange development in India have predicted that the government of India might impose crypto rules by proposing a bill in Parliament. With this, the investors are trying to understand how the rules could impact the future of virtual currencies in one of the largest economies in the world.

Key highlights –

·   Lawmakers might opt to impose tough regulations on the crypto eco-space but there will not be an outright ban.

·  A new bill to be introduced by the Indian government in the parliament to impose a ban on several private cryptocurrencies traded in the market.

·    The rules will not hinder promotions of the underlying technology of digital assets and its use cases – As per sources.

In the past few months, the Indian Government’s point of view has changed after bureaucrats consulted with the stakeholders which included the cryptocurrency exchange operators as well. However, there can be positive news from the government, and there can be strict regulations but not a complete ban on crypto trading in the country.

Cryptocurrency regulations – What can be expected?

As per sources, the Indian government is all set to impose a set of strict rules as unregulated crypto markets are allowing money laundering and terror financing.

Here are the facts –

·  There will be cryptocurrency trading in the country as was earlier and investors will be allowed to buy or sell cryptocurrencies from exchange platforms but have to follow certain guidelines.

·    The rules to be implemented will be focused on making crypto trading safer and ensuring that investors’ money is protected at all costs. So, there is nothing to panic about. 

·   Cryptocurrencies will be classified as an asset class rather than a digital currency, and this initiative will help people invest and grow their crypto with less hassle involved.

·     The new tax bill will provide more clarity on how cryptos can be taxed in the country, and the government is even trying new ways to generate revenues from cryptocurrencies.

·    With a new set of regulatory rules, it might be a bit tough to create new cryptocurrencies which are now created simply through a working internet connection. With regulations in place, there can be a need to fulfill certain criteria to create crypto.

·     Cryptocurrencies might not be considered as legal tender, as many were expecting the digital asset might replace the rupee or co-exist as a legal tender as well.

Summing up, Decentralized investment or cryptocurrency trading is a risky business and does not come under a complete regulatory framework. As of now, the government of India has decided not to put a ban on trading but the set of rules might be able to create awareness through financial bodies like RBI (Reserve Bank of India) and SEBI (Securities and Exchange Broad).