India has long been one of the largest countries in the world where crypto adoption has forged ahead in leaps and bounds.
But India is also a country where politicians and the RBI (Reserve Bank of India) have tried multiple times to ban Bitcoin and other cryptocurrencies and to block bitcoin mining as well.
The first ban came in 2020 but was swiftly overturned by the courts in India. Prime Minister Narendra Modi and his government are determined to create a CBDC or central bank digital currency (a digital Rupee) and their first attempt was the launching of the e-RUPI, a one-time voucher based payment mode which is contactless and cashless.
Has India banned all cryptocurrency?
But the country’s finance minister admitted to not having enough information to make a fateful call.
Yet another statement by a top Indian official suggests that regulatory uncertainty around the status of digital assets in the country will persist in the near term.
Responding to the general discussion of the 2022–23 Union Budget at Rajya Sabha, the upper chamber of India’s bicameral parliament, finance minister Nirmala Sitharaman stated that she was not going to “legalize or ban” cryptocurrency at this moment. The minister added that “Banning or not banning will come subsequently,” when the ministry reviews input from consultations.
How are crypto gains taxed in India?
Sitharaman also mentioned that the state has “the sovereign right to tax” income that citizens derive from cryptocurrency transactions. Furthermore, the government’s capacity to levy crypto taxes is separate from the issue of legally recognizing the asset class.
This argument echoes the statement made earlier in the week by the head of India’s tax authority, who maintained that the plan to tax digital assets does not necessarily mean the legalization of trading.
India has recently become a hotbed for major regulatory news, with rumors of a potential ban stirring up the global crypto space in late 2021. At this point, it appears that the immediate threat has blown over, with the bill containing the ban proposition left out of the parliament’s agenda for the current session.
While continuing to weigh its options on crypto assets, the Indian government has been making strides towards introducing a central bank digital currency, or CBDC, later in 2022 or in 2023.