India considers classifying cryptocurrencies as commodities

Reports from local media suggest that the Indian government may classify cryptocurrencies as commodities and tax them accordingly.

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seems to finally be some progress on the part of the Indian government to regulate and legalize cryptocurrencies. Local media reports indicate that the government is considering classifying cryptocurrencies as commodities. This would be accompanied by the usual regulations for the latter, including taxation and analysis of how they are used.

The Economic Times was the first to report that the new bill

would classify digital assets as commodities. However, much of this seems unclear, and these are just statements from people close to the matter. Sponsored Sponsored

Classifying cryptocurrencies as commodities rather than currency could solve many of the problems the Indian government has with the market. It does not consider the introduction of Bitcoin

as legal tender and strongly maintains the argument that only the central bank should issue currencies.

One of the main aspects of the project that the Economic Times report points out is that the authorities will focus on the end use of the asset. In other words, the technology used by each individual blockchain or cryptocurrency will define their classification.

In addition, new KYC procedures and accounting standards will be introduced. The tax guidelines will be similar to the Securities Transaction Tax (STI). Income tax that applies to commodities would also apply if cryptocurrency is classified as a class of commodities.

The definition and classification of cryptocurrencies will be an important part of the project and at least let investors know “what” cryptocurrencies are. The lobbying efforts of

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many groups in the country are paying off, putting an end to a long year of “back and forth” on regulation.

Long-awaited regulatory clarity by Indian investors

India has often changed its stance on cryptocurrencies. The earliest rumors of regulation started years ago, and the initial stance was that it was a total ban. The central bank ordered banks in the country to stop facilitating cryptocurrency transactions

.

In the aftermath, many Indian investors were left in limbo, uncertain whether their large investments would eventually be invalidated. The Indian market has been strong for cryptocurrencies, and investment numbers continue to grow. It currently stands at over $6.5 billion.

But now things are much brighter it seems. After years of reported draconian bans, followed by legalization and back to bans, Indians may finally be able to relax. </

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This should also have a significant positive impact on the market, as India is a hotbed for cryptocurrency activity. Coinbase

, among others, has set up headquarters in India, while Indian-origin startups are also showing strong growth. The regulation, in its current form, is likely to only encourage an entrepreneurial spirit that certainly no government would want to reverse.

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