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India will impose ban on cryptocurrency payments, deadline for declaring crypto assets and KYC rules – according to a report

According to reports, the Indian government is considering prohibiting the use of cryptocurrency for payments and establishing a deadline for investors to declare their cryptocurrency holdings. Without a warrant, violators may be arrested and held without bail. In addition, the crypto bill may require all crypto exchanges to follow a uniform know-your-customer (KYC) process.

Indian Crypto Bill Proposed Rules

As India’s parliament prepares to debate a cryptocurrency bill, several reports have surfaced about what is contained in the bill, which the government has not made public.

While crypto assets will reportedly be regulated, Reuters reported Tuesday that the Indian government plans to prohibit the use of cryptocurrency for payments, citing an unnamed source and a summary of the bill it has seen.

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The rules will also be “cognizable,” according to the proposed legislation. Violators could be arrested without a warrant and held without bail, according to the news outlet, which cited the bill’s summary:

The Indian government is considering a “general prohibition on all activities by any individual relating to mining, generating, holding, selling, (or) dealing” in digital currencies as a “medium of exchange, store of value, and unit of account.”

Despite the fact that cryptocurrency will not be legal tender in India, as it is in El Salvador, the proposed crypto legislation will grant it legal status.

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Self-custodial wallets, according to the source, will most likely be prohibited. However, as the CEO of a major Indian cryptocurrency exchange explained, this could be difficult. He recently discussed his expectations for self-custodial wallets and new cryptocurrency legislation.

Bloomberg reported Tuesday that the Indian government is planning to set a deadline for investors to declare their cryptocurrencies and comply with the new rules, citing people familiar with the matter.

Furthermore, the proposed cryptocurrency legislation, according to The Economic Times, will require crypto exchanges to share their know-your-customer (KYC) data with regulators and government agencies such as the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), and the income tax department.

According to the news outlet, the crypto bill will also mandate a uniform KYC process for all crypto exchanges, despite the fact that exchange platforms currently have their own procedures.

The government intends to include cryptocurrency in Section 26A of the Income Tax Act in the upcoming budget, according to the publication, which will “require taxpayers to reveal their cryptocurrency investments both in India and abroad.”

NDTV reported last week that it had seen a government cabinet note naming SEBI as the regulator in charge of crypto activities in the country. Furthermore, Indian Finance Minister Nirmala Sitharaman confirmed last week that the cryptocurrency bill has been reworked from its original version, which sought to ban all cryptocurrencies, including bitcoin and ether. She also responded to a number of questions from lawmakers about the proposed cryptocurrency regulation.

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