- Wednesday, April 24, 2024
By: Shubham Ghosh
INDIA has plans to tighten regulation of cryptocurrencies to stop investors from holding them even though its government is least likely to go ahead with an earlier plan to put a ban on private digital coins, Reuters said citing two informed sources.
The government could allow only those that it has pre-approved to be listed and traded on exchanges – an intentionally difficult process, the sources, who spoke on the condition of anonymity, said.
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“Only when a coin has been approved by the government can it be traded, else holding or trading it in may attract a penalty,” one of the sources said.
The Indian government also aims to introduce and pass a cryptocurrency law in the parliamentary session that starts later this month.
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A pre-verification approach would create obstacles for several peer-to-peer currencies that thrive on being outside regulatory scrutiny.
On Thursday (19), Indian prime minister Narendra Modi said all democratic nations must work together to see that cryptocurrency “does not end up in wrong hands, which can spoil our youth” – his first public remarks on the matter.
Earlier this year, the government considered criminalising possession, mining, trading, etc of crypto-assets.
Its stance has undergone a slight change since then and according to the two sources, big capital gains and other taxes might be levied to discourage trading in cryptocurrency, the Reuters report added.
According to a senior government source, the investors “will have to pay over 40% on any crypto gains so far”, adding that additional goods and services sales taxes and securities transaction taxes could be levied over and above any capital gains taxes. The source also told Reuters that a plan is on to ban private crypto-assets to pave the way for a new Central Bank Digital Currency (CBDC).
India’s central bank – the Reserve Bank of India – which recently voiced “serious concerns” about private crypto, is set to launch the CBDC by next month, the news outlet added.
The Indian finance ministry did not respond to the Reuters’ email seeking a reaction.
