Indian Government’s Stance on Crypto
In the city of Bengaluru, India, an event was held last week in which the topic of discussion was crypto/digital assets. Amongst the attendees were Indian Government officials and one of the top officials was Rajeev Chandrasekhar.
Chandrasekhar is currently the Indian Federal Minister of IT and Electronics with an additional ministry of Skill Development and Entrepreneurship.
In his address, Chandrasekhar said that Indian Government has no issues with digital currencies. He claimed that as long as the Indian digital asset industry is operating strictly within its prescribed limits, it can thrive indefinitely.
Reuters quoted Indian IT Minister, who remarked that ‘crypto can enjoy dedicated space if it ensures compliance with laws and regulatory guidelines’.
No Special Legislature or Framework for Digital Currencies Exists
India is one of those countries where the crypto industry is developing fast. Not only the Indian crypto industry is developing fast but also the Indian Government is about to launch a central bank-governed CBDC.
However, the major obstacle is that there is no legal framework for crypto nor is there any special legislature regarding digital assets.
In the last month of the previous year, Indian Government had however said that crypto legislation is in progress.
The Government had also told that before implementing crypto regulations, the country would first like to examine regulations adopted internationally.
Even the Finance Minister at that time explained that India would require international cooperation for creating an effective and robust crypto regulation.
The Finance Minister had further remarked that for the purposes of regulations, India would like to collaborate preferably with the G20 countries.
Crypto Taxation Already In Place
Presently, while there is a legal framework for crypto in India, Indian taxpayers, who own cryptocurrencies, are liable to pay crypto tax.
This crypto tax was originally introduced last year and started to be collected under two different heads. The first head is ‘crypto tax on income’ which is being collected @ 30%.
The second head is “TDS” (i.e. deduction at source), which is being collected from the taxpayers @ 1%.
According to Chandrasekhar, a crypto-focused awareness campaign shall very soon be launched under the auspices of the Indian Government.
Crypto Ban Proposal by Indian Central Bank
On the other hand, the Reserve Bank of India, which is the Indian central bank, has been proposing the banning of cryptocurrencies.
It may be noted that RBI had 2019 also imposed a ban on crypto which was later lifted through Supreme Court’s order in April 2020. Since then many global crypto firms expanded their operations in India through local subsidiaries.
Currently, there are more than 20 million crypto owners in India and the number is increasing fast. India is among the countries where the adoption rate for cryptocurrencies is tremendous.
The adoption of crypto-blockchain technology is tremendous and it is constantly increasing in India. The people are fond of cryptocurrencies there as they believe their lifestyle would improve with crypto adoption.
This is a huge source of motivation for the people in India and this is the reason why the adoption rate for cryptocurrencies is rising in the country.
The crypto entities in the crypto industry have adopted the narrative that the Indian economy would boost as the cryptocurrencies are adopted.
RBI’s Governor Says ‘Crypto Would Be the Cause of Next Crisis’
Shaktikanta Das, RBI’s Governor, was seen suggesting recently that since digital currencies do not possess intrinsic value, they shouldn’t be relied upon”.
Das even went on to suggest that the crypto industry’s existence in the country is bad for the national economy’s stability.
He also claimed that the next financial crisis in the world would be brought by none other than crypto.
Das is also among the top Indian officials who have been advocating against digital currencies. However, he seems to be motivated on launching the Indian CBDC project.