New Delhi:
Bitcoin and cryptocurrencies are back in the news after Congress Maharashtra unit chief Nana Patole and Nationalist Congress Party (Sharad Pawar) leader Supriya Sule were accused of indulging in “illegal Bitcoin activities” during the election campaign.Cryptocurrency And many questions are being raised regarding Bitcoin, what are they and what does the law say about their use.
What is Cryptocurrency and Bitcoin?
Cryptocurrency is a digital or virtual currency that is secured by cryptography (code). It is almost impossible to counterfeit or use them twice. They exist on centralized networks using blockchain technology. Blockchain is a technology through which currencies like Bitcoin operate. Bitcoin is the name of the most popular cryptocurrency, for which blockchain technology was created.
Tax on profits from cryptocurrency at the rate of 30%
Cryptocurrency has no physical existence. Its supply is determined by the protocol, not by the central bank. Talking about their legal aspects, India is preparing a framework for cryptocurrency. However, it cannot be called illegal until it is implemented. The government had announced to impose tax on profits from cryptocurrency at the rate of 30 percent in 2022.
However, despite taxing the income from cryptocurrency, cryptocurrency cannot be considered mandatory and clearly legal.
Cryptocurrency cannot be a “currency”: Finance Minister Nirmala Sitharaman
The Reserve Bank of India (RBI) is also skeptical about the use of private crypto assets and considers it a major threat to the country’s macroeconomic and financial stability. Finance Minister Nirmala Sitharaman has repeatedly said that cryptocurrencies issued by private entities cannot be “currency”. It will become a currency only when the Reserve Bank of India issues a digital currency. The Finance Minister had said in July last year that any effective regulation or ban on cryptocurrencies would require “international cooperation”.
Reserve Bank proposes to ban cryptocurrency
Earlier, the Reserve Bank of India had proposed imposing a ban which was rejected by a court order. RBI considers cryptocurrencies as a huge risk to financial stability and monetary stability. It is noteworthy that on March 4, 2021, the Supreme Court had canceled the RBI circular of April 6, 2018, in which banks and the institutions regulated by it were prohibited from selling virtual currencies. Was stopped from providing services in respect of.
RBI Governor Shaktikanta Das had said last month that virtual assets could create a situation where the central bank could lose control over the currency supply in the economy.
Considering a comprehensive policy for cryptocurrencies
Currently, an inter-ministerial group (IMG) comprising officials from the RBI, Securities and Exchange Board of India (SEBI) and the Finance Ministry is considering a comprehensive policy for cryptocurrencies. The IMG is yet to release a discussion paper on it. , which will give stakeholders an opportunity to put forward their views before taking a decision on India’s policy stance on crypto currency.
