Bitcoin, the world’s largest cryptocurrency, is hovering around $60,000
The government plans to tighten regulation of cryptocurrencies to prevent investors from holding them despite the government’s inability to follow through with an earlier plan to ban private digital currencies, according to two people familiar with the matter. sources familiar with the discussions.
Instead, it could allow only pre-approved government accounts to be listed and traded on exchanges — an intentionally cumbersome process, the sources said, claiming anonymously because the discussions are private.
The first source said: “Only when a coin has been approved by the government can it be traded.
The government aims to introduce and pass cryptocurrency legislation during a parliamentary session starting this month.
Such a pre-verification approach creates obstacles for thousands of peer-to-peer currencies to thrive outside of regulatory oversight.
On Thursday, Prime Minister Narendra Modi said all democratic countries must work together to ensure that cryptocurrencies “do not fall into the wrong hands, which can spoil our youth” – comment His first publicity on the subject.
Earlier this year, the government considered criminalizing the possession, issuance, mining, trading and transfer of crypto assets.
Its stance has changed since then — but only slightly, according to two sources, who said hefty capital gains and other taxes could be levied to discourage cryptocurrency trading.
A senior government source said investors “will have to pay more than 40% for any crypto gains to date,” adding that the additional sales tax on goods and services and stock exchange tax, which may be levied on any capital gains tax.
The Treasury Department did not respond to an email seeking comment.
Last week, Modi chaired a meeting to discuss the future of cryptocurrencies, amid concerns that the unregulated crypto market could become an avenue for money laundering and funding. terrorism, sources said separately on Saturday.
The new rules are also likely to discourage marketing and advertising of cryptocurrencies, losing their appeal to retail investors, said an industry source who participated in a panel discussion. The parliamentary panel’s separate discussion to be held on Monday said.
The government is looking to classify cryptocurrencies as an asset class, as required by cryptocurrency exchanges, rather than a currency, two sources said.
But the senior government official told Reuters that the ultimate plan is to ban private crypto assets while paving the way for a new Central Bank Digital Currency (CBDC).
The Reserve Bank of India, which has voiced “serious concerns” about private cryptocurrencies, will launch a CBDC in December.
Bitcoin, the world’s largest cryptocurrency, is hovering around $60,000 and has more than doubled since the start of the year, attracting a lot of local investors.
There is no official data but industry estimates suggest there are 15-20 million crypto investors in India, with a total holdings of around 400 billion rupees ($5.39 billion).
China’s national foreign exchange planning and regulator, the National Development and Reform Commission (NDRC), this week said it will continue to clean up virtual currency mining in the country, which affects the price of cryptocurrencies.
