Is The Indian Government Toning Down Their Opinion On Cryptocurrencies?
The Indian government appears to be having a rethink on the question of banning the virtual currencies in the country. However, there is no clarity, and the ambiguity continues to be seen. It was only in April that the Indian government took the drastic step of banning any activities in respect of digital currencies as the prices of most of the cryptocurrencies faced high volatility. The nation might have reacted belatedly since countries like China had slapped a ban last year itself when the price of virtual assets was steadily increasing.
During the budget speech in Parliament, Indian Finance Minister, Arun Jaitley, indicated that it was not in favor of any cryptocurrencies though the country preferred blockchain technology. However, there is an indication currently that the intention of the government is not to ban any digital currencies totally. Though this could be termed as somewhat a climb down from its earlier position, it is still difficult to get any definitive stance about the emerging virtual assets from the government side.
At the same time, the establishment is taking whatever step possible on the new age financial instrument. For instance, the government has established a committee to find out the virtual asset market, ethereumworldnews.com reported. If the insider source of the committee is to be believed, then there is no intention of banning cryptos in the country. Significantly, the news or the developments come at a time when the Reserve Bank of India’s deadline to commercial banks came to an end last week in respect of bank accounts associated with digital currencies.
Though the government is blowing hot and cold on the cryptocurrency subject, there is one indication in favor of them. As per the source the main issue in respect of the digital currency is how to regulate the trade and not banning them altogether. At the same time, the government wants to know from where the money comes since it is engaged in weeding out the black money.
One of the possibilities is allowing cryptocurrencies to trade as a commodity so that the government could have better control of regulation. The government is looking at the option seriously, and any favorable decision could mean that it would join the countries such as the United States. Any potential classification of crypto as a commodity would mean that the country is recognizing it as an emerging sector apart from tax implications.
Welcome As Commodities
Coindelta co-founder, Shubham Yadav, reacted to the possibility of cryptos being treated as commodities and said, “Though cryptocurrencies belong to a new class of financial assets, we can still welcome them as commodities and not currencies because of their [highly] volatile prices. Many countries have been already going in this direction, including the U.S.”
The committee is weighing suitable options for regulating the cryptocurrency market rather than banning it. Significantly, one of the mandates is to curb the digital currencies being used as a tool to support any terrorist operations or perpetrating financial crimes. Therefore, the government appears to be moving around strict regulations to legitimize the digital coin market. However, fingers are crossed until the committee makes its recommendations.