India and Cryptocurrency

India and Cryptocurrency

India Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology

Currently, cryptocurrencies are not regulated in India, and the nation’s government has stated that cryptocurrencies are not legal tender and advised their citizens against transacting with these currencies. [1] After cryptocurrencies began surging in India and the government was looking at potential revenue loss, the government formed a committee to report on the use of virtual currency in the country. [2] The committee report recommended a blanket ban on all private cryptocurrency ownership in India. Now, the government is considering introducing a new bill titled “Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.” [3] The bill would give investors six months to liquidate their holdings and not be penalized. [4] India would be the first major economy to go as far as banning possession of cryptocurrency, as other countries have only banned mining and trading. [5] The Reserve Bank of India is also planning to introduce a state-owned cryptocurrency. [6]

P.S. Insights on Cryptocurrency Legal Issues

Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.

Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.

However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.

Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:

Other Cryptocurrency and Blockchain Resources:

Do you have questions about cryptocurrency, digital currency, or blockchain technology? Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now or schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.

[1] Library of Congress, India.

[3] Id.

[4] Aftab Ahmed, Nupur Anand, India to propose cryptocurrency ban, penalising miners, traders – source, Reuters (March 14, 2021).

[5] Id.

India and Cryptocurrency

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India and Cryptocurrency

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