New Delhi, India: India is seeking a middle ground on cryptocurrencies as it finalises legislation to be submitted in Parliament during the forthcoming winter session.
According to a government source, the tough attitude of an outright ban on cryptos is not conceivable due to huge investments in such instruments by Indians, and these unregulated virtual currencies are also unlikely to be allowed as legal tender. “A balance must be reached,” the source said, adding that a final decision on the law’s parameters will be made soon. “A midway road that addresses all stakeholders’ interests is more likely.”
Recently, officials, including those from the finance ministry, were given a full presentation on the advantages and downsides, regulation taken by other countries, investments made by Indians in digital currencies, and the RBI’s opinions on the matter. Another presentation is expected soon to finalise the taxes aspects of digital currency trade, according to the source, who added that it would go to the Cabinet after legal vetting.
According to the source, a rising perspective among government policymakers is that laws should be written in such a way that they can be efficiently implemented, and that technical changes in the digital world should be taken into account.
According to the source, an earlier draught did not adequately address these concerns. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, was first introduced for the budget session, however it was not presented for further consultations. Following that, an inter-ministerial group was formed to look at the proposal and the challenges surrounding such currencies.
In an interview with ET in August, Finance Minister Nirmala Sitharaman said: “We won’t say no to cryptocurrency, as I’ve already stated. We’re arguing that we’ll have to explore how this technology can assist fintech in realising its full potential.”
In July 2s019, a high-level government commission proposed an outright ban on all forms of private cryptocurrency. Anyone trading in them might face a fine of up to Rs 25 crore and a sentence of up to ten years in prison, according to the report.