A televised news report from CNBC India on 20th April reveals that the Indian government is leaning toward granting legality to bitcoin and virtual currencies in the country amid regulations with taxes to be levied on adopters.
Last week, the Indian government established an inter-disciplinary committee to examine the framework for virtual currencies in the country. The committee was installed by the Ministry of Finance, the country’s financial regulator, citing ‘concern’ with the growing adoption of cryptocurrencies in India.
According to today’s CNBC report, that committee has heard discussions about the legality of bitcoin and virtual currencies in India. The report also suggests that the committee is veering toward legislation of the cryptocurrency in India.
Loosely translated, the news report in its entirety is as follows:
Host: The Government wants to give Bitcoin a legal status in the Country. The law wants to levy taxes on it.
We go to [CNBC bureau chief] Lakshman Roy for more information on how the government is planning to deal with this.
Bureau chief Roy: Virtual currency (what we refer to as Bitcoin) has no legal stance currently in this country. So, any transaction made with it has no legal stance. So, there is a high chance that this (legality) will happen.
Which means, there will be relevant acts and laws about it. There will be regulations. There will be Reserve Bank of India (India’s central bank) guidelines for transactions and investments made with bitcoin. There will be tax levied on investments. If you use Bitcoin to make international payments then the FEMA (Foreign Exchange Management Act) will have laws that will affect remittances. And, whatever you get in return for any bitcoin investments will see a tax charge.
Most importantly, whoever wishes to invest in virtual currency/bitcoins will have a strict KYC (know-your-customer) approval process.
Notably, he revealed:
All these things were discussed and put in front of the inter-ministry committee that has been newly appointed for these matters. Most people are convinced that this [bitcoin] has to be regulated, but some disagreed and said there should just be a ban on it and no requirement for regulations. Although, a ban seems unlikely. The committee is supposed to decide by the 15th to the 20th of May by the latest before submitting their proposal to the Ministry of Finance who can then take their [regulatory] actions.
Talk of bitcoin’s legality in the country to the fore on March 24, after an Indian politician questioned if the world’s most widely-known cryptocurrency was a ‘pyramid scheme’ and called for regulation of the industry. The ongoing news story created such fervor that number of major Indian news outlets erroneously reported that bitcoin was deemed illegal amid talk of the cryptocurrency among lawmakers in the Indian parliament.
Indian bitcoin startups have sought an audience with the committee to discuss the advantages and the benefits of bitcoin and blockchain as a technology, with the government.
“Financial inclusion, cheaper cross-border remittance, full trace and track on the movement of value on the blockchain network, and the potential for India to become a financial hub are key benefits that can be derived using virtual currencies,” read a statement by the Indian bitcoin industry earlier this week.
With contributing reporting from Kalabati Majumdar.
Featured image from Shutterstock.