The debate over cryptocurrency legalization has heated up, with the Centre deciding taxing income generated from virtual asset transactions. The finance minister during her Budget presentation made a mention of the fact that any revenue derived from the transfer of any virtual digital asset will be taxed at a rate of 30%.Following that,speculation turned rife that central government would legalise cryptocurrency which was later on refuted by the Finance minister herself. Furthermore, a Digital Rupee or Central Bank Digital Currency (CBDC) is expected to be issued by the RBI in the coming fiscal year. A digital or virtual currency which will work on Block chain technology, CBDC differs from the private virtual currencies and cryptocurrency that have exploded in popularity over the previous decade. Because there is no issuer, private virtual currencies do not represent any person’s debt or liabilities.Encouragingly, the government and the nation’s central bank(RBI) happens to be on the same page regarding the fate of cryptocurrency in the country. Both are in consultation with each other to decide the future of cryptocurrency in India. The Reserve Bank of India (RBI) issued a circular back in 2018 prohibiting all banks from dealing in cryptocurrencies. Later In May 2020, the Supreme Court ruled that the circular was illegal. Lack of substantial infrastructure and perils associated with it are by some means acting as stumbling blocks in legalising this new global phenomena. While there is an apprehension that it may be potentially at loggerheads with the central currency of the country, in case it is legalised. On the other hand, if banned, this could lead to brain drain, drive away future technology and above all ignoring other partners in the supply chain who have already legalized cryptocurrency. The government along with RBI must weigh it’s pros and cons before passing the verdict on virtualcurrency. The current status of cryptocurrency is such that neither it is banned nor it is legalised. In coming months, it is expected that a decision regarding it’s legality will be taken, which will hopefully be in the best interest of the nation.
Editorial: The Crypto Conundrum
