India is reportedly working on a new way to regulate cryptocurrencies. “The government plans to define cryptocurrencies in the new bill, which also proposes dividing virtual currencies according to their use cases,” said a report.
How India Will Regulate Cryptocurrencies
According to reports, India plans to regulate cryptocurrencies as commodities based on use cases. “The government plans to define cryptocurrencies in the new bill, which also proposes to subdivide virtual currencies on the basis of their use cases,” reported the Economic Times on Friday, citing three people who were aware of the development. The publication details:
Cryptocurrencies are treated as an asset / commodity for all purposes including taxation and depending on the use case – payments, investments or benefits.
“Crypto assets can either be categorized according to the technology used or defined according to their end use. So before talking about how the regulations are supposed to work, the government needs to clarify what it means by cryptocurrencies, ”said one of the knowledgeable people. The person added that the government “does not want to allow payments and settlements through virtual currencies”.
In addition, the government will decide which cryptocurrencies can be traded in India.
This would be the first time cryptocurrencies have been categorized based on the technology they use, sources told the news agency, making it clear that the government will focus on the end-use of the asset for regulatory purposes.
The news that the Indian government may be considering regulating cryptocurrencies as a commodity and based on their use cases is well received by the local crypto community.
Nischal Shetty, CEO of the Wazirx crypto exchange, said: “This move is very positive for the crypto industry and I am delighted that the government is taking this direction towards crypto regulation. This will bring more clarity for the entire industry and push more entrepreneurs into this industry. It will reduce the fear of VC investors looking to invest in the crypto industry in India. For private investors and traders, this will again strengthen confidence and convey a feeling of stability. “
Vikram Subburaj, CEO of the Giottus crypto exchange, said: “Just like the internet, cryptocurrencies have a variety of use cases and therefore a nuanced approach is better than a single guideline. Even among the top 20 cryptocurrencies there are big differences in terms of objectivity and attractiveness for investors. “
Edul Patel, CEO of Mudrex, commented: “The idea of dividing cryptos according to their use cases is well thought out and, if implemented efficiently, would give the newly recognized asset class a significant boost. It also shows that the government recognizes that cryptocurrencies are much more than speculative instruments and actual use cases. “
Do you think the Indian government will regulate cryptocurrencies as described above? Let us know in the comment section below.
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