India Ready to Accept Crypto as “Currency”, True or False?

Crypto as an alternate currency to traditional fiat when introduced to the world was no doubt a new experience for everyone. Bitcoin’s invention let the entire world on their toes to experience this uniquely looking kind of currency called the “digital currency”.

However, since 2009, the past few months have been very heart-wrenching for those who were so much into Bitcoin. In these few months, Bitcoin was labeled and considered as a scam as it was proclaimed to be soon after its invention. However, the majority of people from the crypto world believe that Bitcoin is a much better option of investment than any trade business for the time being. Bitcoin went through several ups and downs in the past months. It went to the record high level of US$ 64,000 and went down under US$ 30,000 in no time.

But if one were to take aside Bitcoin’s speculation, it is even considered the best amongst all of the digital currencies.

India has also got alert after Bitcoin’s swing which was simultaneously observed around the world.

Some reformative steps have been taken by the Government of India with regard to digital currencies. In the third month of 2021, the probability of a blanket ban was uplifted in the interest of the general public and crypto derivatives. The government now plans to observe and determine its approach towards cryptocurrency in the country. Certain new rules were introduced by the lawmakers recently aimed towards providing for a legal and regulatory framework for cryptocurrencies.

It was stated by the Ministry of Corporate Affairs (MCA) that crypto holders will declare crypto investment in the annual filings. This being an initial and most important step towards the Indian law for regulating and supervising cryptocurrencies. This major change in the law has created the possibility of upcoming tax laws applicable to cryptocurrency.

While new laws are being made in India, this has limited the banking access for cryptocurrencies, crypto investors, and crypto exchanges. A clarification was made by the Reserve bank of India that no change in RBI’s stance was made. The bank also clarified that it had not asked any bank to refrain from facilitating customers who are involved in the crypto activity.

There is also a news item surfacing in India suggesting that the Indian Government has decided to give legal cover to Bitcoin and several cryptocurrencies. The news items claim that a law is under consideration through which Bitcoin and other cryptocurrencies will be legally regarded as “currencies”. This negates the idea of treating cryptocurrencies as the form of “securities” if the news item is true.

However, one of the top officials from the Indian Government has confirmed that the news item is invalid and baseless. No such law is pending or under pipeline in the meantime where Bitcoin or any other digital assets have been proposed to be given legal backing. The news item was further invalidated by India’s Foreign Exchange Management Act (FEMA), which is the crypto supervising authority of India.

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