The Indian government may regulate Crypto as a commodity, with the introduction of law likely to come around the time the government submits the Union Budget of India in February.
With this development, the Indian government might be working on establishing a legal framework for crypto-based digital currencies as “assets” as early as February, before the next fiscal year.
The Finance Ministry official told Business Today, the law for cryptocurrency would come into action by the time of the next general budget. The potential legal framework will treat cryptocurrencies like a commodity rather than a currency. This will lead to a different approach rather than a complete ban on digital assets in the country, which some of the Indian lawmakers have been considering.
Reserve Bank of India(RBI) will also be involved in laying out the details of any crypto legal framework.
With crypto being labeled as an asset it will lead to tax implications for retail investors and exchanges in the country. While the tax department is trying to tax crypto via trades and exchanges, though no decision has been taken by the government at the time of publication.
There will be a significant impact in the crypto space with India having a nearly 1.4 billion population deciding to establish a concrete legal framework for cryptocurrencies. The government has not yet taken a firm position on regulating digital currency since the earlier blanket ban by RBI in March. There have been several reports making rounds within the government suggesting the Indian government is not keen on creating a new law banning crypto trading in India, and looking out for alternative solutions to regulate digital assets.