India Still Waiting For Global Coordination on Crypto Regulation

India Still Waiting For Global Coordination on Crypto Regulation

  • Indian government can track cryptocurrency movements thanks to the 1% transaction tax.
  • RBI has advised the government to set laws and outlaw cryptocurrencies.

Over the last several months, China has seen one of the most stunning crackdowns on cryptocurrencies in the world. If other emerging nations in Asia follow suit, crypto investors might be in for more hardship in the months and years to come.

However, this year has seen a dramatic shift in fortunes. Earlier this year, the Indian government introduced a 1% tax on all digital-asset transactions over a particular threshold, which was deductible at the time of the transaction. This tax is on top of the 30% rate imposed in April on income derived from such assets.

Crypto Sector in India Waiting to Boom

India is still deciding how to govern cryptocurrencies in the long term. Finance Minister Nirmala Sitharaman of India stated earlier this week that the nation needs global agreement on how to regulate or outlaw digital currencies, given their borderless character.

There is a financial benefit to India’s strategy since it generates income for the government. The Indian government can track cryptocurrency movements thanks to the 1% transaction tax, which is taken directly by exchanges on behalf of the government.

The Reserve Bank of India (RBI) has advised the government to set laws and outlaw cryptocurrencies. Sitharaman went on to say that international cooperation was necessary to avoid any kind of regulatory arbitrage since cryptocurrencies are borderless.

🔶Status of Crypto and NFTs pic.twitter.com/qTaDZGHK8v

— Bitinning (@bitinning) July 22, 2022

Recently, the Minister of State for Finance Ministry, Mr. Pankaj Chaudhary, made a statement clarifying the position of the Finance Act 2022 with regard to crypto and NFTs. Despite all attempts it is unclear when will the government provide a proper framework and regulate crypto in India. However, Finance Minister Nirmala Sitharaman remarked in Parliament on July 18 that “global coordination” is required for any successful regulation or prohibition.

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