The government of India is looking to label crypto exchanges as e-commerce platforms, as well as to introduce a 1% services tax (GST) on digital currency exchanges, to be collected at source.
The move will allow Indian traders to buy or sell Bitcoin (BTC) and other cryptocurrencies as shares, gold or bonds. All crypto exchanges will need to register themselves under the Indian GST regime. The government has previously hinted that they actually might implement a crypto ban, so the news came as a surprise for the Indian crypto community. According to a source from within the government, politicians are now sure that all future decisions should be “proactive, progressive and forward-looking as cryptocurrencies represent an evolving technology.”
India’s crypto market was worth $6.6 billion (~£4.92 billion) in May 2021, compared with $923 million (~£688 million) in April 2020, as per report from a blockchain data platform called Chainalysis.
According to the bill, exchanges will be classified into three categories: those acting as a facilitator, brokerages allowing buying and selling, and trading platforms that provide an interface for trading.
The government has also proposed to designate the Securities and Exchange Board of India (SEBI) as the financial regulator of the Indian crypto market.
There is an increased interest by Indian citizens in further advancing trading Bitcoin and other cryptocurrencies in the country. However, the government is yet to reach any decisions on regulation in an effective and sustainable manner.
The Indian Government has decided to monitor digital currency transactions by classifying cryptocurrency exchange platforms as e-commerce ones, as a result bringing the exchanges under the goods and services tax (GST) regime.
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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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