In what is arguably one of the biggest 360s the world of crypto has ever seen, India has announced that it will not be banning crypto. Rather, it will tax crypto-based income, work to regulate the space, and is even planning to launch a virtual version of the country’s currency called the digital rupee.
India Is Set to Regulate Crypto
This is one of the biggest changes a country has ever exhibited when it comes to crypto. There was a long period when India had a very up-and-down relationship with digital assets. In 2018, for example, it was ruled that all crypto and blockchain businesses could not get access to traditional financial tools and products such as bank accounts. This remained in play for about two years until the nation’s Supreme Court ruled the law unconstitutional.
The ban was reversed, and it looked like India was all set to become the world’s next big crypto hub. Sadly, things didn’t quite turn out this way as just a few months later, it was announced that the nation’s Parliament was looking into a full-on ban of crypto in India. You could not trade digital assets, you could not own them, you could not engage in any crypto activity whatsoever unless you were willing to either pay a fine or serve jail time.
Again, things suddenly found themselves on the verge of turning around as the Parliament stated that it would look at potentially regulating the crypto space rather than banning it. This discussion was originally slated to take place during the winter session of 2021, though it failed to materialize for one reason or another. This got a lot of traders feeling negative about the situation, but now it looks like India has prevailed, and it will be the latest nation to take steps to regulate the industry.
All crypto-based income will be taxed at 30 percent. This seems quite high, though it’s probably better than fully shutting out this growing arena. In addition, the country has announced that India’s central bank plans to launch the digital rupee come 2023.
This makes India very different from its northern neighbor China. That country – after introducing the digital yuan in 2019 – has banned all other cryptocurrencies potentially to end competition for the new asset. India seems content with a world where all coins coexist.
Boosting Blockchain Even Further
Finance Minster Nirmala Sitharaman is not providing specific details about the currency, though he did mention in a statement:
The introduction of a central bank digital currency will give a big boost to the digital economy. Digital currency will also be a cheaper and more efficient currency management system.
Nischal Shetty – chief executive of Wazir X, a popular crypto trading platform in India – said that the development of the digital rupee would likely “legitimize blockchain technology.”