India’s long awaited digital currency law could finally be announced in the upcoming budget in February 2022, putting an end to the long-running discussions of how digital currency activities should be regulated in the country.
Despite widespread skepticism across Indian authorities about digital currencies and digital assets, there has yet to be a formal decision to ban digital currency activities in the country. Practical bans handed down by the Reserve Bank of India, as well as conflicting court rulings, have made it challenging for digital currency firms to operate within India’s jurisdiction.
The digital currency community in India has even been faced with the threat of an outright ban since it was first discussed by officials in 2019. Draft legislation for the sector has been in the works as far back as 2017.
Now, senior officials at India’s finance ministry are signaling that the law could be announced in the upcoming budget early next year, in a move that would help clear the fog of legal uncertainty around the industry.
The latest iteration of the bill would treat digital currency as a commodity, which has implications for the laws that apply to Bitcoin transactions, and the tax treatment of any profits made from it. The government has also pledged to set up a new committee to look at how digital currency income can be taxed, in a sign that there is an appetite for increasing regulation rather than extinguishing the industry altogether.
While the bill has been pledged, no draft version has yet been made available to the public. The bill is also not expected to be presented to parliament during the winter session, meaning there is less immediate scope for scrutiny of the proposed measures.
Nevertheless, the new timeline will be welcomed by India’s digital currency sector, which continues to wait for the new legislation to pass into law.
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