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Author: Admin | 2025-04-28
RBI circular of April 6, 2018, prohibiting banks and entities regulated by it from providing services in relation to virtual currencies. Currently, crypto assets are unregulated in India. Here cryptocurrencies are regulated from the perspective of anti-money laundering law. Besides that, income tax and TDS is levied on earnings from trading in such virtual digital assets. Also, GST is levied on cryptocurrency exchanges. In July last year, Finance Minister Nirmala Sitharaman had said that "international collaboration" would be needed for any effective regulation or ban on cryptocurrency. RBI STANCE: Earlier, the Reserve Bank of India had proposed a ban that was set aside by a court order. The RBI considers cryptocurrencies as huge risks to financial stability, and monetary stability. RBI Governor Shaktikanta Das had last month said that such virtual assets may create a situation where the central bank may lose control of money supply in the economy. The RBI has recommended that crypto assets should be prohibited. Crypto assets are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation for regulation or for banning can be effective only with significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards. WAY FORWARD: Currently, an inter-ministerial group (IMG), comprising officials from RBI, Sebi and finance ministry, is looking into a wider policy for cryptocurrencies. A discussion paper from the IMG is awaited, which will give the stakeholders an opportunity to give their views before India decides on its policy stance on crypto currencies.
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