Cryptocurrencies May Be Allowed To Stay As 'Asset' Instead of Currency: Report

The government may not completely ban cryptocurrencies but classify them as a crypto asset that could be owned like shares or bonds but could not be used to settle transactions. 

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New Delhi: Amid reports of different approaches on cryptocurrencies by the government and RBI and an overall state of confusion regarding its legal status, reports suggest that crypto may be held as "assets"

Publication Economic Times report suggests that the government may not completely ban cryptocurrencies but may classify them as a crypto asset that could be owned like shares or bonds but could not be used to settle transactions. 

The government is coming up with legislation that will regulate the trading of crypto assets while barring virtual currencies for making payments or settling transactions.

“Active solicitation would not be permitted... Details of the bill are being finalised,” government sources told ET.

“The legislation that's in the works could be taken to the cabinet for consideration in the next two to three weeks,” said the source. 

Regulation of trading of the crypto assets could be designated to the Securities Exchanges Board of India (SEBI). 

The upcoming legislation will also address the taxation policy for crypto asset trading. Reports suggest that the government will be introducing a bill on cryptocurrencies in the winter session of the Parliament.

An earlier report by ET had hinted that they may adopt some midway rather than outrightly banning the virtual currencies. 

Any clear ruling on the legal status of cryptocurrencies has kept stakeholders waiting for a long time now. Governor of the Reserve Bank of India, Shaktikanta Das has repeatedly expressed his concern over these virtual currencies terming them as a “serious threat”.

He also doubted the reported numbers of crypto investors and the claimed market value. Whereas the Prime Minister recently chaired a meeting regarding cryptocurrencies where the government’s approach was progressive and forward-looking. 

A Parliamentary Standing Committee on Finance also had recently held discussions with various stakeholders of the cryptocurrencies discussing the pros and cons of these virtual currencies.