Till the year 2020, it was being assumed that the Indian Government is adamant to impose a ban on cryptocurrency. However, in March 2020, when the Supreme Court of India revoked the blanket ban imposed by RBI on cryptocurrencies, in 2018, the scenario changed for the Indian crypto investors.
Even though it was not clear whether the government would ban the crypto assets or not, the decision of the Supreme Court did bring in a ray of hope for the Indian crypto industry.
Since the starting of 2021, there has been a buzz regarding the crypto bill on which the Indian Government was working for quite a long time. The aim of introducing a crypto bill in the country is to regulate cryptocurrency.
The government planned to present the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, in Parliament, during the Budget Session, but it was not introduced for wider consultation.
As per the report published by Economic Times, now the Indian government is considering taking a middle path on cryptocurrencies, by introducing regulations in the upcoming winter sessions.
One of the government sources has recently pointed out that an absolute ban on cryptos is not considered to be feasible in a view of large investments, also, these digital assets are unlikely to be allowed as legal tender.
Further, the source mentioned, “A middle path that balances the concerns of all stakeholders is more likely.”
The policymakers went through the detailed presentation regarding cryptocurrency which included the pros and cons, other countries’ regulations, the investment made by the Indians and RBI’s views on the issue.
The source also informed that soon another presentation for finalizing crypto trade tax would be out and after a legal vetting the presentation will be forwarded to the Cabinet.
It has further added that the policymakers are planning to draft the law so that it could be executed effectively and help in technological development.
An earlier draft did not address the issues effectively, therefore the government decided to set up an inter-ministerial group so that they could look into it and propose effective measures.
In August 2021, Nirmala Sitharaman, the Finance Minister of India, released a statement, specifying, “I’ve already said that we are not saying no to cryptocurrency. We are saying we’ll have to see how this technology can help fintech to maximize the potential that it has.”
In July 2019, a government panel announced an outright ban on all forms of private cryptocurrencies. It also suggested that any individual or institution dealing in cryptocurrency would have to pay a fine of Rs. 25 crores and imprisonment of up to 10 years.