In a major relief to crypto holders, it is being said that government officials in India are not planning to eliminate the currencies, but regulating them as assets. According to a cabinet note, citizens will no longer be able to hold crypto assets on foreign exchanges or in private wallets. As soon as the new law is passed, people will have time to transfer their properties to meet these requirements. All Indian crypto exchanges will fall under SEBI’s jurisdiction.
A new term, ‘crypto assets’ will replace the existing one ‘cryptocurrencies’ over the next year with a clear differentiation between the government’s and RBI’s plans to launch a digital currency (CBDC). To declare crypto assets and bring them under the crypto exchange platforms, which will be regulated by the market regulator, there will be a cut-off date.
It is possible the Centre might give Indian cryptocurrency holders a deadline to declare assets and comply with upcoming new regulations, according to a Bloomberg report citing people familiar with the matter. Due to cryptocurrencies’ potential to be classified as financial assets, SEBI (Securities and Exchange Board of India) will reportedly be tasked with overseeing and regulating them.
According to Bloomberg, any violation will result in a fine of Rs 20 crore, or around $2.7 million, or imprisonment of 1.5 years, depending on the severity of the crime. Also in the works is setting a minimum threshold or limit on crypto investments in order to protect small investors.
India’s cryptocurrency market grew by over 641 percent in 2021, according to a Chainalysis report. According to the Chainalysis 2021 Global Crypto Adoption Index released in August this year, the Indian crypto space is a vibrant and thriving ecosystem and the country happens to be the 7th most ‘crypto-aware’ place in the world.
Is India So Obsessed Cryptocurrencies?
India is ranked 7th most Crypto-aware nation in the world. Due to the COVID-19 pandemic and looming inflation concerning fiat currencies like dollars and rupees, cryptocurrencies have gained a lot of attention around the world. Because people around the world are not entrusting their money to their bank accounts, stock market or government bonds, cryptocurrencies have become a speculative asset and a store of value.
The reason for crypto’s popularity in India is because people are seeing neighbors investing in bitcoin for long, and then becoming rich. So, that’s why there is so much craze around it. Since the exchanges are advertised and marketed, they have joined the cryptocurrency investment.
