What could have been seen as an end to cryptocurrency in India is not the case anymore, as the government has decided to delay Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 further.
The government sources cited this delay as more discussion was required on the bill with stakeholders.
The delay in India’s cryptocurrency and digital assets legislation is justified because of the complexity and impact it will have on crypto investors, said experts.
In its current form, the Cryptocurrency and Regulation of Official Digital Currency Bill government were mulling to put a ban on all cryptocurrencies. The bill also has a provision that would prosecute citizens for holding crypto.
But, the government, understanding the importance of crypto, has decided to further delay it.
As per an estimate, there are close to 15 million crypto users in India, but some reports suggest there are 100 million crypto users, and close to over $7 billion is invested in various crypto projects.
There are also many crypto projects that are completely owned and operated by Indians, which employ over thousands of workforce and it has a capacity to provide millions of high-value jobs too in the months to come.
Another reason the government is delaying the bill is that India has been one of the countries that have been adopting crypto at a higher pace than developed nations like the US and UK.
A report recently said that India ranks second to Vietnam, ahead of other countries such as the US, UK, and China in crypto adoption.
Having said that, if India decides to ban crypto then all the people working in the sector will lose their job. Imagine the impact it will have on the lives of people working in the crypto & blockchain sector.
Other than this, crypto investors that have invested billions will also lose their hard-earned money, as they all have purchased crypto with Indian Rupee, no one has received the crypto for free.
There are various blockchain companies that are also providing services to many state governments that are solving many real problems related to the land registry, privacy, digital certificates, supply chain, logistics, and much more.
Looking at all these the central government has decided to spend more time on how to look and include it in the crypto bill.
On various platforms, Indian finance ministry officials have said that they will ban only private cryptocurrency without giving any details, in some instances, they say that they will treat crypto under asset class and segregate crypto projects on a use case basis.
Crypto experts believe that as the government has decided to impose a 30% crypto tax on profit and 1% TDS on every transaction in the Budget 2022-23, which will be applicable from 1 April 2022, they have just taken some time to study the bill once again.
As per the media reports, the current crypto bill has many draconian provisions, under which a crypto holder could have been arrested immediately with no legal safety.
Many believe that as the government will be launching its own central bank digital currency (CBDC), Digital Rupee, globally, it wants to be seen as a nation that adopts blockchain technology.
Very recently, US President Joe Biden has signed an executive order for studying cryptocurrency and its adoption. Even its arch-rival Russia is giving positive signals on crypto adoption.
Dubai has recently passed a law that will regulate crypto, non-fungible tokens (NFTs), and nations like Singapore, Estonia, Malta are at the forefront of becoming crypto hubs.
South American nation, El Salvador has taken a giant leap in legalizing Bitcoin as legal tender and spending a billion in building a Bitcoin city.
Under the crypto tax, the Indian government will treat cryptocurrency, NFTs, or any form of digital assets as virtual digital assets.
But, the Reserve Bank of India (RBI), the central bank, has always opposed a move to regulate or regularize crypto. They have been lobbying for a complete ban citing that crypto can pose a challenge to the macroeconomic and financial stability of the Indian Rupee.
RBI has said that it would be difficult to check and track, monitor, and regulate crypto assets as well as crypto exchanges where users are trading in cryptocurrencies.
There are other major issues that the government needs to look into like tokenization of assets that are backed by assets like company shares, gold, and real estate.
Due to all these issues, the government has decided to delay the bill, as the new bill incorporates all the concerns raised by the stakeholders including crypto exchanges, crypto & legal experts, RBI, crypto investors, others.
