The government of India has been reported to be working on a new framework for regulating crypto assets in the country. According to recent reports, the government has proposed a new draft bill to define crypto assets and provide clarity on the definition of cryptocurrencies. The proposed amendments are said to compartmentalize crypto assets on the basis of their uses cases, as stated by three insiders aware of the plan.
The government’s plans for regulating crypto assets imply that virtual currencies will be treated as commodities for purposes, including tax and peruse cases such as payments, investments, and utilities. These use cases form the basis for the financial authorities to regulate crypto assets and classify them in accordance with their features.
A crypto proponent advised the authorities during an assembly by stating crypto-assets can be classified on the basis of technology they use or they can be defined on the basis of their end-use. The proponent added that the financial authorities should classify what constitutes crypto assets, adding that the government of India is not looking for payments and settlements with crypto assets.
In addition to the classification of digital assets, the government will decide which cryptocurrency will be allowed to trade in India.
This marks the first time that crypto assets will be classified on the basis of the technology they use. Inside sources revealed that the government intends to focus on the end-use of the crypto assets for regulatory purposes.
India’s plans to regulate crypto assets on the basis of their use cases and definition as commodities were met with positive remarks from the local crypto community, with exchanges praising its new outlook on digital assets.
CEO of Mudrex, Edul Patel, praised the idea of compartmentalizing crypto asses on the basis of their use cases, stating it would significantly boost the recognized asset class if implemented efficiently. he added that India’s classification move promotes the idea that crypto assets are more than speculative instruments and they possess actual use cases.
Vikram Subburaj, the CEO of Giottus, a crypto exchange, stated the government’s new classification policy is best suited to the asset classes as the majority of the cryptocurrencies have a multitude of use cases. He added that among the major crypto assets in the market there stands a wide difference between the objective of asset and their appeal to investors.