CryptocurrencyBitcoin, Ether and Matic have become a hot topic in the country as they have been making huge profits in recent times. However, its highly volatile nature and gray regulatory situation have always kept the demand side in jitters, investors say. Now, the supply side, or exchanges, is facing funding issues, which negatively impacts cryptocurrency trading.
Recently, crypto exchange Coinbase suspended rupee transfers to its UPI trading app as India’s National Payments Corporation (NPCI) earlier said it was “not aware” of any crypto exchange using its payment network, ET reports.
“We are committed to working with NPCI and other relevant authorities to ensure that we comply with local expectations and industry standards,” a Coinbase spokesperson said in a statement to Bloomberg.
Aside from Coinbase, it owns four other cryptocurrency exchanges as well outstanding rupee deposit The ET report mentioned that the banks and payment gateways that have been seen are withdrawing support for transferring funds to their platforms.
tax on cryptocurrency
Union Budget 2022 proposed a 30 percent tax on profits from the sale of all crypto assets, with a one percent tax deducted at source on all such transactions. The new rules became applicable from 1 April. A new section 115BBH was included in the Income Tax Act, 1961, to tax virtual digital assets. The rules also state that losses from digital assets cannot be carried over into the next year.
In the absence of any law regulating cryptocurrency, then legal status Of these origins is not yet clear. After the proposed Union Budget tax on cryptocurrency, investors said the rulings effectively legalized cryptocurrency trading. However, Finance Minister Nirmala Sitharaman said that taxing cryptocurrencies does not mean they are legalized. The matter is still under consideration.
Also in the Rajya Sabha, the finance minister said the center will decide whether or not to ban cryptocurrency later, but that taxing transactions does not legitimize it.
In February during a press conference, Sitharaman said that the government and the Reserve Bank of India (RBI) were “on board” with regards to cryptocurrency processing, and said discussions were underway regarding the regulatory treatment of these digital virtual assets.
She said: “We are all discussing before the budget, the discussion continues and we will continue the discussions. All the decisions that have been taken on it, it is clear that it is very serious, it is a digital currency from the central bank of some description, so it is clear with more focus after the consultations.”
Sitharaman also said that the government will announce its stance on cryptocurrency after completing the ongoing consultation process. In the past, the Reserve Bank of India warned people not to invest in cryptocurrencies.
Referring to the speculative bubble that engulfed the Netherlands in the 17th century, Reserve Bank of India Governor Shantikanta Das said that these digital assets lacked intrinsic value even a tulip.