India will ban cryptocurrencies and regulate crypto exchanges and products: Reports

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India is on the verge of blocking the use of cryptocurrencies for making payments and will set a deadline for investors to disclose their crypto holdings. If they fail to comply, violators may be arrested without a warrant and detained indefinitely. Besides a model crypto bill, the crypto domain may also have a uniform know-your-customer (KYC) process to have all exchanges follow.

India will ban cryptocurrencies & Proposed Indian Crypto Bill Rules

The proposed rules in the Indian Crypto Bill have been in the news lately. While governments and regulators grapple with how to legislate cryptocurrencies in a way that best reduces harm and exploitation, entrepreneurs and thought-leaders explore how we might design crypto-ecosystems for good.

Anonymous reports have been leaking what’s inside a private cryptocurrency bill in India’s parliament, but the government has not yet made those documents public.

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The Indian government will reportedly regulate the use of cryptocurrencies in the country, but it will also ban all cryptocurrency-based transactions in India, Reuters reported today.

The summary of the bill also states that the new rules will be “cognizable”. If someone violates these, they can be arrested without a warrant and held on bail.

The Indian government is planning a ‘general prohibition on all activities by any individual on mining, generating, holding, selling, (or) dealing’ in digital currencies as a ‘medium of exchange, store of value and a unit of account.’

Despite the fact that cryptocurrencies aren’t legal tender in India, entirely like they are in El Salvador, crypto legislation will grant them official status.

The source says that self-counted wallets could be banned, this seems difficult as explained by the CEO of a major Indian cryptocurrency exchange. The CEO said what he expects from self-custodial wallets and said to have followed regulation.

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The Indian government is set to set a date to let investors declare any cryptocurrency holdings and comply with the new rules, according to a report from Bloomberg. The deadline will reportedly come into effect in May.

The proposed legislation will require crypto exchanges to share their KYC data with all regulators and government agencies including SEBI, the Reserve Bank of India (RBI), and the Income Tax Department

The crypto bill being put forth will also call for a common KYC process across all crypto exchanges. It was also mentioned that these companies have their own procedures they go by.

Concerning taxation, the government is going to add cryptocurrency to Section 26A of the Income Tax Act in their upcoming budget. This will require taxpayers to reveal their cryptocurrency investments.

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The government has established the SEBI to act as the overseer of cryptocurrencies in India, an NDTV report states. Finance minister Nirmala Sitharman has confirmed that the cryptocurrency bill will be reworked and bitcoin and ether will still be legal for “electronic record purposes,” with no restrictions on their use. She also answered a number of parliamentary questions relating to the proposed cryptocurrency legislation.

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