The Indian Government is planning on implementing a law which would control cryptocurrency as commodity.
The Indian government could try as early as February to create a legal framework for crypto-based digital currencies as "assets".
According to a report in the Indian edition of Business Today on Tuesday, officials at the country's Ministry of Finance said a potential regulatory framework would treat cryptocurrencies more closely to commodities than currencies. If this law is implemented, it would be a different approach than the total ban on digital assets in the country, which some Indian lawmakers are reportedly considering.
The officials added that any cryptocurrency laws in the country will likely be enforced by the time the government announces the Union of India budget on February 1, which will take effect before the next fiscal year. They added that they are working with the Reserve Bank of India or RBI to work out the details of each cryptocurrency legal framework.
Labeling crypto as an “asset” under Indian law is likely to have tax consequences for retail investors and stock exchanges in the country. India's tax authorities are reportedly considering taxing cryptocurrencies through shops and exchanges, but at the time of writing, it appears that no decision has been made by anyone in the government.
With a population of around 1.4 billion, India, which chose to create a special legal framework to buy cryptocurrency and other purposes, and this will most likely make significant waves in space. Governments have largely failed to take a firm stand on regulating digital currencies since the RBI lifted a full ban in March. Since then, numerous reports have circulated citing government sources indicating that the country's parliament passed a new law banning cryptocurrency trading in India and is also looking for alternative solutions to regulate digital assets.