Crypto Bill: Preparations are being made for regulation on private cryptocurrencies like BitCoin. The central government may empower the stock and commodity market watchdog SEBI to monitor and regulate crypto trading. According to information received from sources by Financial Express, the government is considering a proposal to keep crypto as a financial asset. Investors who have just invested in private cryptocurrencies like bitcoin may get at least three months to disclose their holdings as per the new rules and regulations.
The final decision on this will be taken by the cabinet, which may draft the Cryptocurrencies and Regulation of Official Digital Currency Bill 2021 on Wednesday. The new bill may use the term crypto assets instead of cryptocurrencies.
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Bill can be introduced in winter session only
At present the winter session of Parliament is going on. The government plans to bring the crypto bill in this session. According to the list of Legislative Business of the Lok Sabha published on November 23, the bill has a provision to ban all types of private cryptocurrencies. However, under the new law, there will be some exceptions regarding the promotion and use of crypto-related technology, that is, certain types of digital currency can be approved.
According to information received from sources, the government may ban the use of cryptocurrencies as legal tender and declare it as financial assets. Provision will also be made in the crypto bill to launch the official digital currency of RBI. The government is planning to amend the income tax rules to bring crypto investments under the tax net in the budget to be presented in February next year.
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Declaring assets not a solution: Chief Economic Advisor
In a recent interview, Chief Economic Advisor KV Subramanian said that even declaring private cryptocurrencies as financial assets cannot ignore the dangers associated with it. Subramanian said that caution is necessary before taking any decision related to this because the value of crypto is not linked to any underlying asset or income nor is it linked to actual economic activities. In such a situation, its price can be easily moved up and down, due to which the volatility can be very high. It will not be possible for retail investors to deal with high volatility.
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