Bitcoin fell up to 17 per cent, Ethereum went down 14 per cent, and Dogecoin over 20 per cent, over initial reports that the Indian government ‘may’ pass a cryptocurrency bill banning private tokens.
A government panel has recommended all private cryptocurrencies, except any virtual currencies issued by state, be prohibited in India, according to the reports.
The Indian government’s cryptocurrency bill is likely to prohibit all the private cryptocurrencies in India, with certain exceptions
official Lok Sabha website
While there may not be a blanket ban on cryptocurrency in India, according to sources, with the new bill, Parliament aims to bring in more regulation of cryptocurrency, during the upcoming winter session.
The Centre had earlier formed the panel to study the issues related to digital currencies and propose specific actions regarding the crypto coins, and this bill seems to be the actionable outcome.
Cryptocurrencies are not taxed in India currently, but taxpayers need to declare their crypto investments.
The rules and regulations around taxation on cryptocurrency are still at a nascent stage and will take some more time before it takes a firm shape.
Recently, Prime Minister Narendra Modi held a meeting with officials on cryptocurrency scenario in India and the way forward, and has even spoken at events about the ‘harmful effects’ of trading in cryptocurrency on the youth, if it were to fall in the ‘wrong hands.’
The central government sources had mentioned earlier it was looking at forward looking and progressive regulation on cryptocurrencies.
Given the very nature of cryptocurrency, it will be interesting to see if increased regulation poses an existential threat to crypto in India
After the meeting, Parliaments standing committee on finance met to seek views from various stakeholders in the industry.
Earlier in May, FM Nirmala Sitharaman had said that a ‘very calibrated position will be taken on crypto and digital currency as the world is moving rapidly with technology.’
While a blanket bans seems unlike, expect more regulations, is the general consensus among industry experts.