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The Indian government has reportedly proposed to ban the use of cryptocurrency for payments and to set a deadline for investors to report their crypto holdings. Offenders can be arrested without a warrant and detained without bail. Additionally, the crypto invoice may require a uniform Know Your Customer (KYC) process for all crypto exchanges.

Rules proposed in India’s crypto bill

While a cryptocurrency bill awaits passage by the Indian parliament, several reports have been released on the content of the bill, which the government has not made public.

While crypto assets would be regulated, the Indian government plans to ban the use of cryptocurrency for payments, Reuters reported on Tuesday, citing an anonymous source and a summary of the bill it saw.

The bill also states that the rules will be “cognizable”. Violators can be arrested without a warrant and detained without bail, the outlet detailed, citing the summary of the bill:

The Indian government provides for a “blanket ban on all activities by any individual on the extraction, generation, possession, sale or trade” of digital currencies as “a medium of exchange, store of value and unit of account “.

While the cryptocurrency will not be legal tender in India, as it is in El Salvador, the proposed crypto legislation will give it legal status.

Self-guard wallets are likely to be banned, according to the source. However, that can prove difficult, as the CEO of a large Indian cryptocurrency exchange explains. He recently outlined his expectations for self-custodial wallets and new crypto legislation.

The Indian government also plans to set a deadline for investors to declare their cryptocurrencies and comply with the new rules, Bloomberg reported on Tuesday, citing people familiar with the matter.

Additionally, The Economic Times reported on Wednesday that proposed cryptocurrency legislation will require crypto exchanges to share their Know Your Customer (KYC) data with regulators and government agencies, including the Securities and Exchange Board of India. (SEBI), Reserve Bank of India (RBI) and Income Tax Service.

The crypto bill will also require a uniform KYC process for all crypto exchanges, the outlet added, noting that the exchange platforms currently have their own procedures.

Regarding the taxation of cryptocurrency, the government plans to add cryptocurrency to Section 26A of the Income Tax Act in the upcoming budget, the publication said, noting that this “will require taxpayers to disclose their cryptocurrency investments both in India and abroad.”

NDTV last week reported seeing the government cabinet memo appointing SEBI as the regulator overseeing crypto activities in the country. Additionally, Indian Finance Minister Nirmala Sitharaman confirmed last week that the crypto bill has been reworked from its original version which seeks to ban all cryptocurrencies, including bitcoin and ether. She also answered several parliamentary questions regarding the proposed cryptocurrency regulation.

What do you think of the crypto regulations that India has reportedly proposed? Let us know in the comments section below.

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