The government of India has long been undecided about regulating or banning BTC and other cryptocurrencies. But now, new information suggests that the South Asian country will finally allow BTC as an asset, like gold and bonds.
However, on the other hand, the Indian government must ban the largest cryptocurrency in market value as a currency. In other words, BTC cannot be used in daily transactions for payments, for example.
The information was provided by the local news portal The Economic Times.
The new developments come shortly after the country’s prime minister presided over a meeting that decided not to ban BTC. Rather, analyze it and regulate it.
“The government is finalizing legislation that will pave the way for regulating the trade in crypto assets, while preventing the use of digital currencies for payments and transactions,” says the article published on Wednesday (17).
According to the portal, the country must adopt a different approach to cryptoactives. India has one of the largest crypto communities in the world. Thus, any decision taken in the country can have a wider effect on the ecosystem as a whole.
Despite this, the Indian government has not yet presented significant guidelines for the sector. However, legislation is under preparation and must be brought to the cabinet for consideration before the end of the year.
The government has also not decided who will oversee the country’s crypto industry. According to local sources, the Securities and Exchange Board of India (SEBI) is at the forefront as the most likely regulatory body.
“Discussions on regulation are ongoing,” said the source at The Economic Times.
Taxation and classification of exchanges
Also according to the source, the government is also working on tax aspects. In this sense, it is expected that the next legislation will address this.
On this topic, another local portal, India Today, published that the government is planning to introduce a 1% fee on cryptocurrency transactions. In practice, exchanges will likely charge investors who use the platform for this.
The report also mentions that brokers will possibly be classified into three categories: facilitators, brokers and trading platforms.
While brokerages help connect buyers and sellers, trading platforms provide software to conduct trades and monitor markets.