Cryptocurrency investors are not yet off the hook in India as the government remains undecided on the legal status of digital assets
In a recently published interview, India’s Financial Secretary TV Somanathan told Outlook magazine that a cryptocurrency ban may still be on the table.
He also said that taxing cryptocurrencies would not necessarily make them regulated, reiterating the clarification provided by Finance Minister Nirmala Sitharaman:
Should cryptocurrency be banned, regulated or remain unregulated and unbanned? All possibilities are open. It can be prohibited, it can be regulated or it can be left neither regulated nor prohibited but taxed.
Earlier this week, Sitharaman announced a 30% levy on cryptocurrency assets in a move that many have misinterpreted as crypto legalization.
Somanathan says the government has rushed to put in place a tax regime for cryptocurrencies to avoid a slew of disputes caused by uncertainty over taxation of the nascent asset class.
The finance secretary says cryptocurrencies will remain legal in India as long as there is no blanket ban.
With nearly 1.4 billion people, India has one of the largest cryptocurrency communities, but regulatory uncertainty remains a major concern for investors.
The Reserve Bank of India (RBI) imposed a ban on cryptocurrency transactions in 2018, but it was later lifted by the Supreme Court in March 2020.
In November, a bill prohibiting the mining and holding of private cryptocurrencies appeared on the government’s legislative agenda. However, the controversial legislation was scrapped soon after, with local media reporting that the country’s securities watchdog would be responsible for regulating digital assets.
As reported by U.Today, India’s long-awaited crypto bill would not be introduced during the parliamentary session as lawmakers continue to hold discussions with stakeholders regarding its contents.