Report – Regulation

The Indian government has reportedly proposed banning the use of cryptocurrency for payments and setting a deadline for investors to declare their crypto holdings. Violators may be arrested without a warrant and held without bail. Additionally, crypto billing may require a unified know-your-customer (KYC) process across all crypto exchanges.

Proposed Rules in Indian Crypto Law

As a cryptocurrency bill is waiting to be recorded Several reports have surfaced in the Indian Parliament about the draft law, which the government has not made public.

While Crypto assets According to reports, the Indian government plans to ban the use of cryptocurrency for payments, Reuters reported on Tuesday, citing an unnamed source and a summary of the proposed bill.

The draft law also stipulates that the rules will be “cognizable”. Violators can be arrested without a warrant and held without bail, the news outlet explained, citing the bill's summary:

The Indian government plans to impose a “general ban on all activities by any person to mine, produce, own, sell (or) trade” digital currencies as a “medium of exchange, store of value and unit of account.”

While cryptocurrency will not be legal tender in India as in El Salvador, the proposed crypto legislation will give it legal status.

According to the source, self-custody wallets are likely to be banned. However, this may prove difficult, as the CEO of a major Indian cryptocurrency exchange explains. He recently described what he expects regarding self-custodial wallets and the new crypto legislation.

The Indian government also plans to set a deadline for investors to declare their cryptocurrencies and comply with the new rules, Bloomberg reported on Tuesday, citing people familiar with the matter.

Additionally, The Economic Times reported on Wednesday that the proposed cryptocurrency legislation will require crypto exchanges to share their Know Your Customer (KYC) data with regulators and government agencies, including the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI) and the Income Tax Department.

The crypto bill will also require a uniform KYC process for all crypto exchanges, the news agency added, noting that exchange platforms currently have their own procedures.

Regarding crypto taxation, the government plans to include cryptocurrency under Section 26A of the Income Tax Act in the upcoming budget, the release said, noting that this will "require taxpayers to disclose their cryptocurrency investments both in India and abroad."

Last week, NDTV reported that it has seen the government's Cabinet note identifying SEBI as the Regulator Monitoring crypto activities in the country. Also Indian Finance Minister Nirmala Sitharaman Confirmed last week that the crypto bill was revised from its original version, which aimed to ban all cryptocurrencies, including Bitcoin and Ether. you too replied several parliamentary questions on proposed cryptocurrency regulation.

What do you think of the crypto regulation India has reportedly proposed? Let us know in the comments section below.

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