The government’s current plan includes creating a broad framework around crypto assets that would give them a legal credence in India.
“The department of economic affairs (DEA) and the ministry of electronics and information technology (MeitY) are aiming to table the draft Bill which will be presented in the budget session,” an official directly involved in the drafting of the Bill told ET on the condition of anonymity. “The idea is to open it up for debate, but the sense is that cryptocurrency will be a regulated commodity in the near future.”
A copy of the draft Bill has already been shared with the prime minister’s office (PMO), source cited above, added.
Several cryptocurrency exchanges have reached out to the government directly or through their association to seek clarity and lobby around the Bill, said people aware of the development.
The government, said another person aware of the development, will not be going into the details of sub categorising the crypto assets as per its use or based on the technology they use.
“While the initial thinking was on the lines to go categorise the cryptocurrency into various parts and specify what’s legal and what’s not. Now, the Bill will only speak about a broad framework, without going into specifics,” a person aware of the development, said. While the work on fine-tuning the proposed Bill is currently on, industry insiders said the draft could require more clarity on defining different types of virtual currencies.
According to another person with direct knowledge of the matter, the original plan was to table the Bill in the winter session, but that will not be possible now.
The government has reached out to some experts and regulators in this regard, said people aware of the development.
“There are a lot of regulatory issues around cryptocurrencies that a law should address starting from definition of the asset class, and who will regulate it, as this will have income tax and GST implications. The regulations must also protect the investors and specify how fraudulent transactions or operators can be nabbed and punished,” said Rashmi Deshpande, partner at law firm, Khaitan & Co.
The exchanges want the government to at least differentiate between various crypto assets and technologies such as NFT, decentralised finance (DeFi) and Meme coins. As per the existing Cryptocurrency Bill draft, the government is looking to just put the basic framework in place without articulating the asset class or who will regulate the cryptocurrency.
In the last few months, Indian investment in Cryptocurrencies hit the $10 billion mark, ET first reported on November 1.