Yerevan(CoinChapter): A wave of controversy arose after the Indian government proposed a law enforcing what initially was perceived as a blanket ban on all cryptocurrencies, banning not only all transactions but also declaring that even holding digital assets will be regarded as illegal.
This bill, which did NOT become law yet, proposes to criminalize all mining activity, along with holding any cryptocurrency and trading it in any shape or form. As big companies have recently shown open interest in cryptocurrencies, this ban threatens to cost them considerable losses and significant alliances. If the bill becomes a law, Indian will be the only major country yet to ban cryptocurrency altogether, which is unprecedented. The Chinese government did ban trading and mining, but not possession.
Understandably, a wave of discontent flared up, as there are more than $1,5 billion worth of investments in cryptocurrency from 8 million individuals and companies from India alone. Despite the potential ban, the transactions are not slowing down, as cryptocurrencies, particularly Bitcoin, saw an unprecedented rise in the past year, and it’s still going strong, reaching a record-breaking value of $60.000 past Saturday.
Initially, during a panel back in 2019, the government took a rather harsh approach, suggesting punishments up to jail time for possession, mining, or generating cryptocurrencies, calling it a ‘Ponzi scheme’ that puts people and the economy at risk. The Reserve Bank of India stated that decentralized cryptocurrencies (such as Bitcoin) have a destabilizing effect on the economy, however, they are getting ready to launch their own cryptocurrency shortly, which will be issued and controlled by the Ministry of Finance.
Government officials are reluctant to comment on the bill, but the Minister of finance Nirmala Sitharaman shed some light on the true plans of the government, by saying that they are not being close-minded about technological progress, but rather that “There will be a very calibrated position taken.” And if the bill passes, all cryptocurrency holders will be given up to 6 months to trade it off for fiat money, or the official governmental cryptocurrency.
Imposing a tax on digital assets is a much milder position than banning them altogether, which would surely do more damage than good, considering the prices on Bitcoin have gone up almost twice in the past year.
Indian Companies Asked to Disclose Crypto Investments
In their Standard SCH III balance Sheet reporting with the Ministry of Corporate Affairs under the company’s act 2013, has asked companies to disclose their crypto holdings. It suggests that the Indian government might propose a capital tax on corporate companies.