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Crypto Regulations in India : Central Govt To Grant Window To Crypto Holders To Declare Assets: Report

FM Niramala Sitharaman

The central government will grant a window to crypto holders to declare their assets and operate in accordance with the new rules, Bloomberg reported citing people familiar with the matter.

Media reports had earlier published that capital markets regulator Sebi is likely to take the charge to oversee cryptocurrencies as authorities are finding ways to classify them as financial assets.

The government is all prepared to introduce a ‘well consulted’ cryptocurrency Bill that intends to regulate cryptocurrencies rather than imposing an outright ban that may affect millions of crypto holders.

The Bill shall use the term ‘crypto assets’ instead of ‘cryptocurrencies,’ and will not be in tandem with the central bank’s plan to create its own digital currency, sources said.

Any violators may have to face the penalty of as much as ₹20 crores ($2.7 million) or be imprisoned for 1.5 years, according to the proposals, sources told Bloomberg.

The government may also consider setting a  minimum threshold for investing in crypto assets so that the rights of small investors are not vitiated, Bloomberg had reported earlier.

The union government is reluctant to promote the cryptocurrency sector in the country.

Finance Minister Nirmala Sitharaman had said earlier that the government has made some changes to an earlier bill proposing banning all private cryptocurrencies. Earlier, there was no recognition of Bitcoin as a currency in the country, she added.

The crypto market in the nation has surged 641% in the year through June 2021, as per an October report from Chainalysis, a crypto-analysis firm. The government is now planning to make a provision that will tax gains from digital currencies, and also stricter rules for transactions in virtual coins could be there due to the unregulated nature of the business.

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