The government has held extensive discussions on the legal framework for cryptocurrencies, including a meeting chaired by the prime minister last month. Government is of the opinion that crypto may not be allowed as currency, but stricter rules can be made to allow them to be held as property.
The Cabinet may consider: cryptocurrency A person familiar with the plans told ET that the bill will be introduced this week and later in Parliament.
FATF Guidelines
Regulations are likely to set limits on investments for individuals commensurate with foreign remittances, as well as strict disclosures. A government official said the tax treatment on gains and gains on such transactions would be defined in the upcoming budget.
NS reserve Bank of India has objected, saying cryptocurrencies pose a threat to macroeconomic and financial stability as well as capital controls.
The proposed legislation is likely to align with the guidance of the Financial Action Task Force (FATF). The 2021 FATF Guidance included updates on six key definitions of Virtual Assets and Virtual Asset Service Providers (VASPs), Risks and Tools to Address Money Laundering and Terror Financing Risks, and Licensing and Registration of VASPs, etc.
Revised FATF standards, released in October, require countries to assess and mitigate risks associated with virtual asset financial activities and providers; license or registration providers and subject them to supervision or monitoring by competent national authorities.
Bill set for introduction
The government has listed the Regulation of Cryptocurrencies and Official Digital Currency Bill, 2021 among the legislation slated for the winter session to be introduced in the Lok Sabha. The bill was also listed in the budget session, but could not be introduced as the government decided to redraw it.