The union government is considering imposing new rules and regulations on cryptocurrencies in India after reports of growing crypto adoption in the country. Officials from the government said this would be done in order to protect people and ensure cryptocurrency activities do not become money laundering schemes. The move towards legalizing cryptocurrencies comes after calls for stricter regulation over bitcoin exchanges due to the unregulated nature of the business. However, officials claimed there were no plans to recognize Bitcoin as a currency in India during an announcement last week. Meanwhile, Indian traders were placing heavy buy orders when Bitcoin fell by 2%, which pushed prices back up again around 5 p.m., when trading volumes are normally at their lowest ebb across the globe.
The crypto market in India has grown 641% in the year through June 2021, according to an October report from Chainalysis, a crypto-analysis firm. The government is now considering a deadline for people to declare their cryptocurrency assets as part of the new rules and regulations. Anyone found with unreported digital assets would be liable for a fine up to twice the amount of tax evaded and may face imprisonment up to 7 years. This news comes as the global market braces for another potential Bitcoin price crash.
Bitcoin, the first and most well-known cryptocurrency, was created in 2009. India has no plans to recognize Bitcoin as a currency in the country, according to Finance Minister Nirmala Sitharaman last week. The Indian crypto market has grown 641% in the year through June 2021, according to an October report from Chainalysis, a crypto-analysis firm. Officials from the government said this was done in order to institute new rules and regulations on cryptocurrencies in India. They also said any violators could be fined as much as ₹20 crore ($2.7 million) or imprisoned for 1.5 years, according to the proposals.
In addition, Reuters reported that Indian traders were placing heavy buy orders when Bitcoin fell by 2%, which pushed prices back up again around 5 p.m., when trading volumes are normally at their lowest ebb across the globe.
The government’s approach to regulating the cryptocurrency industry has been met with mixed reactions from the community so far. Some believe that it is a step in the right direction, while others feel that it will only lead to more confusion and chaos.