India Has New Plan to Regulate Cryptocurrencies: Report
India plans to regulate cryptocurrency as commodities on the basis of use cases. According to The Economic Times, the government plans to define cryptocurrency in the draft bill. The bill also proposes to separate virtual currencies based on their use cases. The publication details:
Cryptocurrencies are treated as an asset/commodity in all respects, including taxation, as well as for investment, payments and utility.
“Crypto assets” can either be classified based on the technology they use, or on their end-use. One person familiar with the subject said that before discussing how regulations should work, the government must define what cryptocurrencies mean. According to the person, the government is not seeking to allow virtual currency payments or settlements.
The government will also decide which cryptocurrencies are allowed to be traded in India.
Sources told the news outlet that this would be the first time that cryptocurrencies will be classified by the technology they use. This clarifies that the government will concentrate on the end-use and regulatory purposes of the asset.
Local crypto communities were pleased to hear that the Indian government may be considering regulating cryptocurrency as commodities based on their use.
Chief executive officer of Wazirx crypto exchange, Nischal Shetty said that this step was very positive for the industry. He also expressed his gratitude that the government has taken steps towards regulation. This will provide more clarity to the industry and encourage more entrepreneurs to enter this sector. This will lessen the anxiety of VC investors looking to invest in India’s crypto industry. This will boost confidence and provide stability for traders and retail investors.
Vikram Subburaj (CEO of crypto exchange Giottus) stated that cryptocurrencies can be used in a variety of ways and that a balanced approach is better than a one-size fits all policy. There is wide variation in investor appeal and objective among top 20 cryptocurrency.
Edul Patel, CEO of Mudrex, commented that the idea of separating cryptos according to their use cases was thoughtful and would provide a significant boost for this newly recognized asset class if implemented effectively. This also shows that the government recognizes that cryptocurrency are more than just speculative instruments. They have real use cases.