HomeLegal & RegulationLaw on cryptocurrencies to be introduced during budget session

Law on cryptocurrencies to be introduced during budget session

India’s long-awaited law to regulate cryptocurrencies is expected to be introduced in the Parliament during the upcoming budget session in February 2022, Finance Ministry officials told Business Today.

An inter-ministerial committee constituted in 2018 recommended that cryptocurrencies be prohibited in the country and also proposed imprisonment for violations. A draft bill released in March 2021 carried out similar provisions recommended by the 2018 committee.

But the government began to rethink the approach since April this year, with finance minister Nirmala Sitharaman reiterating that the government will not completely prohibit out the crypto industry.

In August, the finance minister said the draft is awaiting approval of the cabinet. The government is also examining the taxation aspects of crypto assets.

RBI, the country’s central bank is currently working on a phased implementation of central bank digital currency from December 2021. Earlier in June, the central bank governor Shaktikanta Das told reporters that the bank had conveyed its concerns to the central government.

The issuance, use, and trade of cryptocurrencies is currently a grey area in the country. India is said to be among the fastest-growing cryptocurrency markets globally, with an estimated 20 million having invested in private cryptocurrencies.

The sector has recently seen two unicorns i.e., companies valued at over US$ 1 billion with CoinSwitch and CoinDCX valuations at over US$ 1 billion in their recent funding rounds.

The Indian crypto industry has emerged as one of the busiest in terms of deal-making in the year 2021. The total risk funding in domestic crypto and blockchain startups shot up to $587.16 Mn as of October 17 this year, compared to $37 Mn in the previous year.

As per reports, the cryptocurrency industry is in talks with the Indian government and regulators to assuage their concerns about the sector.

Kumar manages the tech backend at Crypto Vakil. He intends to work at the intersection of law and technology.

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