19 September 2021
An ET report issued by the authorities of India claimed that they might tax Cryptocurrency transactions and exchanges shortly.
An anonymous source stated that the tax department favors taxation instead of an outright ban. However, the taxation of Cryptocurrency will not make it an asset class. “The tax department favors taxing cryptocurrency exchanges and trades in the country. But, it doesn’t mean that they would be categorized as a valid asset class.”
These ET reports came as a sigh of relief for the Indian Crypto ecosystem as they have been in the dark about regulations for a long time. The report also contrasts the latest comments made by Mr. Shaktikanta Das, the governor of the Indian Central Bank, Reserve Bank of Indian (RBI) who admitted that Crypto-assets pose major concerns.
The governor said that “We have major concerns on cryptocurrency, which we have conveyed to the government. With regard to advice to investors, well, central banks don’t give any investment advice. It’s up to each investor to make his own appraisal, to do his own due diligence and take a very careful call with regard to his own investments.”
The current governor of RBI is raising alarms concerning crypto legalization but the former deputy governor of the central bank R. Gandhi has quite a different take. During an interview, R.Gandhi affirmed that India must treat Cryptocurrencies as an asset class or commodity and bring it under existing exchange laws. Adding more, he said once Cryptocurrency becomes mainstream, it could be used for paying goods and services.
Regardless of all the uncertainty around Crypto regulations, the Indian Crypto ecosystem has thrived to new highs. A report issued by Chainalysis stated that India ranks second in terms of Cryptocurrency adoption. Meanwhile, another report claimed that the Crypto investment in India rose nearly 20,000% since last year. Apart from that, Indian Crypto platforms have observed a great burst in adoption during peak bull season in the first quarter. Indian crypto exchange, CoinDCX closed a successful funding round to enter the crypto unicorn club.
Disclaimer: The author’s views and opinions are for informational purposes only and do not constitute financial, investment, or other advice.