Search Global Export Import Trade Data
Recent Searches: No Recent Searches

Cryptocurrency: Still on the sidelines.

Date: 01-03-2021
Subject: Cryptocurrency: Still on the sidelines
An outright ban on cryptocurrencies may not be the most practical option.

By Kaushalya Venkataraman

This week has seen revived global interest in cryptocurrencies, with Elon Musk breaking headlines by investing more than $1.5 billion in Bitcoin. In India, however, cryptocurrencies (such as Bitcoin and Ether) are currently trading at a discount.

This is largely because cryptocurrencies have been operating in a regulatory grey area. In 2013, the Reserve Bank of India raised concerns over the potential financial, operational, legal and consumer protection risks emanating from crypocurrencies. In 2018, the central bank issued an order stating that banks and financial institutions shall not deal with crypto-related businesses, and all regulated entities falling within the purview of RBI shall stop providing services to such platforms. The Supreme Court struck down the provisions which literally banned crypto-trade in 2020.

Meanwhile, the government has sought to introduce draft bills to regulate/ban cryptocurrencies. The ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ is to be tabled before Lok Sabha in this session. The latest bill seems slightly more positive and forward-looking than the previous one, titled the ‘Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019’. It seems to suggest that instead of an outright ban, the government intends to regulate cryptocurrencies. Though the text of the proposed 2021 bill is not yet out, the gist of the regulations available on the Lok Sabha website seem to highlight that this is indeed not the case as under the 2021 bill only RBI will be empowered to create an official digital currency. The fate of cryptocurrencies such as Bitcoin and Ether is murky as the 2021 bill seeks to prohibit ‘private cryptocurrencies’ though it is not clear what would be considered as a ‘private cryptocurrency.

India has always been a cautious player when it comes to adopting new revolutionary technology. This is even more so when it concerns technologically advanced financial products. In this space, RBI has always followed a conservative approach that some argue has stifled innovation in the fintech space, while others state is a necessary evil.

In developed economies, such as the United Kingdom, Australia, and the United States, cryptocurrency is not banned but rather regulated in varying degrees. In the United Kingdom, the government is currently conducting consultations to understand how to regulate crypto-assets to ensure consumer protection, financial stability and market integrity. From a tax perspective, they are treated as an asset and gains, if any, are subject to capital gains tax. In Australia, the government regulates every person involved in the life cycle of crypto-assets from issuers, intermediaries, miners, exchanges and trading platforms. From a tax perspective, it is treated as an asset similar to the UK. The United States of America has been the pioneer in cryptocurrencies, and the government regulates them to a limited extent. From a tax perspective, cryptocurrencies are treated as ‘assets’ similar to the UK and Australia.

Currently, there are only a handful of countries that have banned cryptocurrencies (eg Morocco), and even in those countries, the ban has not prevented individuals from trading in cryptocurrencies because of the decentralised nature.

Therefore, an outright ban on cryptocurrency by the Indian Government may not be the most practical option since not only will it stifle innovation in this space but will also fail to curb Indians from investing and trading in cryptocurrency in offshore jurisdictions (as was the case with foreign exchange derivatives as investing offshore would fall into a grey area).

Regulation of cryptocurrency would be a middle ground and would provide the regulator with oversight into the operations of the players and would also help in protecting the consumers and curbing money laundering concerns.


Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Exim Help

What is New?

Date: 30-09-2022
NOTIFICATION No. 86/2022- Customs (N.T.)
Notification in relation to Land Customs Stations and routes "the pipeline of M/s Numaligarh Refinery Ltd. connecting NRL Siliguri Marketing Terminal in India to Parbatipur in Banlgadesh" as a route of Phulbari LCS by amendment of Principal Notification No. 63/1994-Customs (N.T.) dated 21st November, 1994 .

Date: 30-09-2022
Notification No. 84/2200-CUSTOMS (N.T.)
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver- Reg.

Date: 28-09-2022
NOTIFICATION No. 20 /2022–Central Tax
Seeks to rescind Notification No. 20/2018-CT dated 28 th March, 2018.

Date: 28-09-2022
Notification No. 51/2022-Customs
Seeks to amend notification No 25/2021-Customs to amend prescribed TRQ for specialty sugar.

Date: 28-09-2022
NOTIFICATIONNo. 19/2022–Central Tax
Seeks to make amendments (Second Amendment, 2022) to the CGST Rules, 2017.

Date: 28-09-2022
NOTIFICATIONNo.18/2022–Central Tax
Seeks to notify 01.10.2022 as the date on which provisions of sections 100 to 114, except clause (c) of section 110 and section 111 of Finance Act, 2022 shall come into force.

Date: 27-09-2022
Notification No. 50/2022-Customs
Seeks to further amend notification No. 50/2017-Customs, dated the 30th June, 2017

Date: 23-09-2022
NOTIFICATION No. 81 /2022-Customs (N.T.)
Courier Imports and Exports (Electronic Declaration and Processing ), Second Amendment, Regulations, 2022 for facilitating E-commerce exports of jewellery-Reg.

Date: 16-09-2022
Notification No. 29/2022-Central Excise
Seeks to amend No. 18/2022-Central Excise, dated the 19th July, 2022 to decrease the Special Additional Excise Duty on production of Petroleum Crude and export of Aviation Turbine Fuel.

Date: 16-09-2022
Notification No. 30/2022-Central Excise
Seeks to further amend No. 04/2022-Central Excise, dated the 30th June, 2022 , to decrease the Special Additional Excise Duty on Diesel.

Exim Guru Copyright © 1999-2022 Exim Guru. All Rights Reserved.
The information presented on the site is believed to be accurate. However, InfodriveIndia takes no legal responsibilities for the validity of the information.
Please read our Terms of Use and Privacy Policy before you use this Export Import Data Directory.


C/o InfodriveIndia Pvt Ltd
F-19, Pocket F, Okhla Phase-I
Okhla Industrial Area
New Delhi - 110020, India
Phone : 011 - 40703001