Finance Minister in Budget 2022 clarified the Taxation aspect of Crypto (VDA) assets. However, Regulations and Legal clarity on Crypto are awaited as discussions are ongoing between the Government agencies and the Industry. Parliament has resumed from 14th March and Finance bill will be tabled sometime in late March for approval. The Tax provisions may or may not change. In the meantime, A lot has changed across the globe with various measures, regulations and tax benefits being offered by Nations in a bid to attract Crypto Investors and grow their economy. A few of the major developments are:
1. The United States (US):
President Joe Biden signed an executive order laying out a National policy for digital assets. The US is viewing Crypto as an opportunity to further strengthen its leadership in the global financial system. The US wants to support and harness the benefits of Crypto while also ensuring Consumer safety & protection and Mitigating the use of Crypto for illegal activities. The Order mentioned specifically to promote Responsible development and use of Crypto assets in the US. Agencies including SEC, FTC and Various representatives of Executive departments have been ordered to coordinate and provide a report to the president.
The US is taking leadership in regulating and promoting the use of Crypto assets for benefit of the economy.
2. European Union (EU):
European Union is also working on full-fledged Crypto regulations called the MiCA framework (Markets in Crypto assets). These regulations will provide a uniform regulatory framework across all member nations of the EU and provide a positive environment for the development of Crypto assets. Recently, it was proposed to limit the use of Crypto assets that are generated or rely on Proof-of-work consensus mechanism (like Bitcoin, Ethereum, Monero etc.) and are not environment friendly.
However, This proposal to limit the use of PoW Crypto assets in the EU and to stop the use of such Crypto assets in a phased manner over a period of time was rejected by a vote of 30 - 23 in the Economic and Monetary affairs committee of the European Parliament.
3. Dubai:
Emirate of Dubai has adopted its first crypto law and set up a regulatory body called "Dubai Virtual Assets Regulatory Authority". The Objective of the regulator is to promote security and transparency for Crypto Investors, Regulate and authorise virtual asset service providers and regulate the trading of virtual assets.
Dubai now wants to position itself as a world leader in terms of emerging technologies like Crypto assets and Blockchain.
4. Israel:
Bank of Israel has proposed draft regulations requiring banks to conduct their risk analysis and provide banking access to Crypto firms. Until now, Banks in Israel were following a blanket approach of not providing Crypto firms with banking access. However, these proposed regulations are the right step in ensuring Crypto firms complying with all Anti-ML and regulations are provided with uninterrupted banking access thereby helping grow the ecosystem in the Country.
To Conclude,
Every major economy across the world is formulating regulations to promote the growth of Crypto projects. India should not be left behind. We urge the Government to provide a Supportive and Tax friendly ecosystem for the Crypto Industry.
Share my petition.