Cryptocurrency Bill at Union Budget 2022: Here's What to Expect
Categories: Crypto News
Calls for crypto regulation from governments across the world are mounting as we step into 2022 but India's cryptocurrency sector has been thriving in a rather legal grey area for quite some time now. The union government has been keen on introducing a cryptocurrency regulation, or a bill, but if recent reports are anything to go by, further delay is expected as the upcoming budget session of parliament that commences on January 31 is unlikely to offer any immediate regulatory relief to investors or other industry stakeholders. The bill is already delayed as it didn't get discussed during the winter session of the parliament that concluded on December 22 last year although Finance Minister Nirmala Sitharaman had earlier said that a “well-consulted” bill would be coming through and that it would be tabled in the parliament once the cabinet clears it. But a recent report by Coindesk reveals that the parliament intends to buy itself more time to hold more discussions and build consensus on the regulatory framework. Crypto industry insiders, investors, and traders are expecting the introduction of a proper tax policy framework for crypto earnings in the upcoming Union Budget 2022 although that is likely to form only a portion of the eventual bill. Buying and selling cryptocurrency could be included under the ambit of reporting in the Statement of Financial Transactions (SFT) like trading companies usually report the sale and purchase of shares and mutual fund units. The Indian government is keen on regulation, but it wants to hold more discussions and build a consensus, given the rapidly evolving technology involved. At the virtual summit of the World Economic Forum on January 17, Prime Minister Narendra Modi called for simultaneous global action to regulate cryptocurrencies, emphasising that efforts by any one country may not be sufficient. But another reason why the government is trying to buy more time is the Reserve Bank of India's plan to launch a central bank digital currency (CBDC). As per a report by The Hindu, the Reserve Bank of India had decided to pilot a simpler CBDC model and to utilise the lessons from the pilot in creating a more sophisticated CBDC. Now, a digital currency or CBDC is issued by the government or the central bank. Unlike cryptocurrencies, whose volatility is widely evident, a digital currency is more stable and backed by the authorities — similar to a stablecoin in essence, but that's not the only difference. Cryptocurrencies, including stablecoins, are decentralised, which may not be the case with the state-issued digital currencies.