As the Indian government formulates the new cryptocurrency Bill amid its growing adoption, new details have emerged that it is working on to compartmentalise virtual currencies on the basis of how they are being utilised like for payments, investment or as a utility.
As per an ET report, citing sources, the new draft bill, expected to be tabled in the Parliament’s winter session, will treat cryptocurrencies as an asset/commodity for all purposes, including taxation, with proper regulation.
Touted as the most important asset class of the 21st century, more than 1.5 crore Indians are currently holding over Rs 1,500 crore worth crypto assets. This will be the first time when cryptocurrencies like Bitcoin or Ethereum will be categorised as per their use cases.
Earlier this week, Indian banks began easing curbs on the purchase of Bitcoin and other cryptocurrencies via their channels. The move started after the Reserve Bank of India (RBI) said that banks cannot refer to its April 2018 circular to warn against investments into cryptocurrency after it was struck down by the Supreme Court.
The decision by the government to classify cryptocurrencies as per their use case will help boost the adoption of digital coins in the country, which is already witnessing a great momentum. Finance Minister Nirmala Sitharaman said last week that she is awaiting an approval from the Cabinet on a bill on cryptocurrency.
The inter-ministerial panel on cryptocurrency under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies has submitted its report. The fresh details emerge as cryptocurrencies witness a growing adoption in the country. The investment in cryptocurrencies grew from nearly $923 million in April last year to $6.6 billion in May this year in India.
According to a latest report by blockchain data platform Chainalysis, India currently ranks 11th out of 154 nations in terms of cryptocurrency adoption. India has more than one crore crypto investors, and the number is significantly growing every day with several domestic crypto exchanges operating in the country.
However, Indians own less than 1 percent of the world’s Bitcoin to date. The RBI is also set to launch its first digital currency trial programmes by the end of the year, according to its governor Shaktikanta Das. Bitcoin is currently hovering around the $50,000 mark (as on September 3). The most popular cryptocurrency has been trading in the green with a market cap of nearly $943 billion.