Officials from India's Finance Ministry said any potential law on cryptocurrencies would likely come around the time the government submits the Union Budget of India in February.
The Indian government may be looking into establishing a legal framework for crypto-based digital currencies as "assets" as early as February.
According to a Tuesday report from Indian news outlet Business Today, officials with the country's Finance Ministry said the potential legal framework would treat cryptocurrencies closer to commodities than currencies. If this legislation comes to fruition, it would represent a different approach than an outright ban on digital assets in the country, which some Indian lawmakers have reportedly been considering.
The officials added any law on cryptocurrencies in the country would likely come around the time the government submits the Union Budget of India on Feb. 1, in time to take effect before the next fiscal year. They added they were engaging with the Reserve Bank of India, or RBI, to work out the details of any crypto legal framework.
Labeling crypto as an “asset” under Indian law would likely have tax implications for retail investors and exchanges in the country. The Tax Department of India was reportedly looking at taxing crypto earnings through trades and exchanges, but no decision has seemingly been reached from anyone in government at the time of publication.
With a population of roughly 1.4 billion, India choosing to establish a concrete legal framework for cryptocurrencies would likely make significant ripples throughout the space. The government has largely not taken a firm position on regulating digital currency since overturning a blanket ban from the RBI in March. Since that time, multiple reports have circulated that cite sources within the government suggesting the country’s parliament is backing down from creating a new law banning crypto trading in India, and also looking at alternative solutions to regulate digital assets.