The Indian government has mapped out future legislation for regulatory framework around digital currencies in the region.
The decision comes after years of uncertainty surrounding the status of trading virtual assets in the country – with Indian governance previously taking a cautious approach to the emerging tech.
However, speaking to Bloomberg TV, Finance Secretary T.V. Somanathan recently stated: “We have now put in a taxation framework that treats crypto assets the same way we treat winnings from horse races, or from bets and other speculative transactions. They (cryptocurrencies) are in a grey area. It’s not illegal to buy and sell crypto.”
Further regulations are being developed by the government, with all proposals having to be first cleared by India’s Cabinet before being handed to lawmakers.
Somanathan added: “What will happen to the future regulation of crypto that’s an ongoing debate. The government’s approach is to consult widely and also to look at what’s happening internationally.”
The country is planning to launch its own digital currency from 1 April. According to the government, by doing so the Reserve Bank of India will create an environment where consumers can enjoy a cheaper, more efficient currency management.
Steps taken by the Indian government follow the global trend of countries evolving their regulatory framework when it comes to digital currency, as the payment tech continues to grow further into the mainstream economic picture.
India is one of the fastest growing peer-to-peer crypto markets in the world. This is because together with Africa, Asia often has the sharpest limit on the amount of national currency available to transfer outside of countries. Digital currencies however can circumvent those limits, allowing for more financial freedom.
Moreover, countries with high inflation rates and rising populations such as India drive more people towards joining the blockchain. In 2021 alone the Chainalysis Crypto Adoption Index estimated that usage of digital currencies increased by 881%.