In a recent turn of events, it seems that the Indian government is finally ready to regulate cryptocurrency trading. While there were rumors earlier this month that suggested otherwise (due largely because no specific bill had yet been introduced), news (from an official source) has recently come out saying they will be making some important changes soon enough.
The Indian government is working on a consultation paper regarding cryptocurrencies and Ajay Seth, the country's economic affairs secretary has said that inflation should start decreasing in the next months.
The Indian government has yet to decide how it will regulate cryptocurrencies, but in the meantime, they are examining legislation from other nations.
The government has announced that they will be imposing a 30% tax rate on profits produced via investments in cryptocurrency. However, there is a lot of confusion about how this will work in practice and what the implications for blockchain companies could be.
Notably, just last week after the collapse of Terra (LUNA) and the stablecoin TerraUSD (UST), India's central bank issued a warning to its citizens against investing in the crypto market. The Reserve Bank of India (RBI) warned that by doing so, they could be "exposed…to an investment risk involving a high degree of credit risk and asset price volatility."
The Governor of India's central bank, Shaktikanta Das has raised concerns about the volatility in cryptocurrency markets and how they need to be regulated.
The topic of cryptocurrency has been gaining momentum in recent times, with officials from the Ministry Of Finance talking to both IMF and World Bank about how best to regulate it.
In a recent interview, India's Minister of Finance Nirmala Sitharaman said that while the government is considering regulating cryptocurrencies they do not want to take action quickly. She stressed her belief in taking time for decisions and ensuring all factors are considered before making any final conclusions about how best to regulate these new currencies
Cryptocurrency investments are now being taxed in India! The new laws will tax digital currencies at 30%. And to make things worse, investors need to pay 1% TDS on their earnings starting in July.