India is all set to introduce new rules to regulate cryptocurrency as the Union government plans to introduce a bill to ban all private cryptocurrencies in the upcoming winter session of Parliament.
According to the Lok Sabha bulletin released on Tuesday, cryptocurrency And the Regulation of Official Digital Currency Bill, 2021 seeks to create a facilitating framework for the creation of an official digital currency which will be issued by the Reserve Bank of India. India (RBI). The new bill also seeks to ban all private cryptocurrencies in the country. However, it allows some exceptions to promote the cryptocurrency and the technology underlying its use. The Bill will be introduced, considered and passed in the upcoming session beginning next week.
In April 2018, the Reserve Bank of India (RBI) had advised all entities regulated by it not to transact in virtual currencies. However, in a 2020 judgment, the Supreme Court set aside the RBI circular and allowed trading of cryptocurrencies in India. More than 100 million people are said to have invested in cryptocurrencies in India so far. RBI has repeatedly warned against the use of cryptocurrencies. Earlier this month, RBI Governor Shaktikanta Das also called cryptocurrencies a threat to the financial system.
However, India is not the only one to tread cautiously on the crypto path. There are many others too.
Here’s how other economies around the world are dealing with cryptocurrencies:
China
After initially welcoming all crypto-related activities, China has now become one of the most restricted crypto-markets in the world. The country has officially banned trading cryptocurrencies since 2019. However, it continued online through foreign exchanges.
Chinese state intuition warned buyers earlier this year that they would have no protection to continue trading in bitcoin and other currencies online. In May, government officials vowed to step up pressure on the industry. The next month, banks and payment platforms were asked to stop facilitating transactions. The country also banned the mining of currencies. In September, China clarified that those involved in these virtual currency-related businesses are criminally liable and will be prosecuted.
The European Union
In the European Union, each country has its own regulation for cryptocurrencies. Most of these have opted for a soft-touch regulatory framework. The European Commission in September last year issued a draft law titled ‘Markets in crypto-assets regulation’. It states that cryptocurrencies will be treated as regulated financial instruments. As per the draft, any firm holding, trading, offering brokerage services or providing investment advice in relation to cryptocurrencies will require prior approval from regulators.
United Kingdom
In the UK, the trading of cryptocurrencies is not directly regulated. However, offering services such as trading in cryptocurrency derivatives requires authorization. The Financial Conduct Authority (FCA) is the body that grants licenses to authorized cryptocurrency-related businesses. The FCA periodically issues warnings to investors that they should invest with caution.
United States of america
Different states in the United States have different rules. Overall, the United States has been in favor of allowing all cryptocurrency activities.
Canada
Cryptocurrency is not legal tender in Canada. However, cryptocurrencies are legal in the country. In addition, tax regulations apply to digital currency transactions, including transactions conducted with cryptocurrencies. Using digital currency does not exempt consumers from tax obligations in the country.
France
France began regulating cryptocurrencies in 2019. In France, cryptocurrencies are taxed in the same way as movable property.
Turkey
In April, Turkey banned the use of cryptocurrencies and crypto-assets to purchase goods and services. The country’s central bank published the law stating that cryptocurrencies and other such digital assets based on distributed ledger technology cannot be used directly or indirectly as a means of payment.
Protector
El Salvador is the only country in the world to recognize bitcoin as legal tender. According to the law of the land, any goods or services previously payable in dollars can now be paid for in bitcoin as well.
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