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The Indian government is reportedly planning on a new draft bill that seeks to compartmentalize cryptocurrencies as commodities based on their use cases like payments, as an investment or utility.
Indian Govt Plans to Compartmentalize Cryptocurrencies
According to an ET report, the new draft bill is expected to be tabled in the Parliament’s next winter session that will look into defining cryptocurrencies as an asset/commodity for all purposes including taxation.
“The government in its draft bill is working towards defining cryptocurrency and its treatment in various use cases, so that it can be treated correctly in the books of accounts plus it should be taxed in the right manner. It is not looking to allow payments and settlements through virtual currencies,” a source familiar with the matter said.
However, the government is not in the favor of allowing cryptocurrencies as payments and settlements. Only those cryptocurrencies will be allowed to trade that has been approved by the Indian government.
“Crypto-assets can be either categorised on the basis of the technology they use or they can be defined on their end-use. So, before talking about how the regulations should work, the government has to spell out what it means by cryptocurrencies.”
Indian Banks Going Soft on Crypto Trading
Earlier this week, Indian banks reportedly softened their stance on cryptocurrency trading. In fact, the country’s top crypto exchange WazirX has listed Internet banking payment options from noted public and private banks in the country. Prior to that, banks had withdrawn providing services to the crypto platform.
However, the financial institutions suddenly going soft on crypto exchanges may not have to do with them going crypto-friendly. Reportedly, banks can now only monitor transactions going through net banking or debit card channels, those using the Unified Payments Interface (UPI) channels to buy crypto are outside the purview of the banks.
Currently, over 15 million Indians are holding digital assets worth over $2 billion.