The former deputy governor of the RBI views cryptocurrencies as a taxable asset or commodity.
The former deputy governor of the Indian Reserve Bank (RBI) spoke about the country’s financial and crypto ecosystem and stated that digital assets must be accepted.
Speaking at the inaugural HODL ’21 virtual conference hosted by the Blockchain and Crypto Assets Council (BACC) on September 7, Rama Subramaniam Gandhi said that crypto can be used for payments in business but views it more as an asset class.
The regulatory situation in India remains unclear as politicians are still puzzling over legislation. Earlier this month, the government announced that it was working on a bill to define cryptocurrencies as commodities that could be taxed. If accepted, they cannot be used for payments, but instead can be traded and invested as assets.
The central bank banned all commercial banks from allowing their clients to make cryptocurrency-related transactions in 2018, but the ruling was overturned by the Supreme Court in February 2020.
Gandhi, who served at the central bank from 2014 to 2017, insists that cryptocurrencies should be treated as assets or commodities and taxed accordingly. Developing a regulatory framework and treating it as such would allow Hindus to invest and own digital assets. If the asset is mined rather than bought, it should be subject to capital gains tax, he added.
He also stated that the government should keep an open mind on cryptocurrency-related economic transactions, but warned against the anonymity traits some blockchains have, adding that the public must abide by any compliance rules set by the state.
09-09-2021, Mr Advice TEAM