Discussing the impacts of cryptocurrency, the RBI officials said it will have a negative impact on the banking system as these being attractive assets people may invest their hard-earned savings in these currencies which may result in banks having lesser resources to lend.
The slide in the value of digital assets comes as stock markets around the world also dropped in recent days. On Monday, some Asian markets headed lower again with Japan's benchmark Nikkei index down by around 2 percent.
The Finance Bill was approved by the Lower House after accepting 39 official amendments moved by Finance Minister Nirmala Sitharaman and rejecting the amendments proposed by the opposition by voice vote.
The 2022-23 Budget has brought in clarity concerning the levy of income tax on crypto assets. From April 1, a 30 per cent I-T plus cess and surcharges will be levied on such transactions in the same manner as it treats winnings from horse races or other speculative transactions.
"RBI does not issue a cryptocurrency. Traditional paper currency is a legal tender and is issued by RBI in terms of provisions of RBI Act, 1994. A digital version of traditional paper currency is called Central Bank Digital Currency (CBDC)," said Minister of State for Finance Pankaj Chaudhary.
In August 2020, Boyd and Mehtani traveled to Longview, Texas, where they attempted to exchange more than USD 4,50,000 for Bitcoin. They were temporarily detained and the money was seized.
In its Wealth Report, Knight Frank stated that 18 percent of global UHNWIs now own cryptocurrencies or tokens, and 11 percent have invested in NFTs (non-fungible tokens).
Notably, the The Reserve Bank of India's order banning banks from supporting crypto transactions, was reversed in March 2020, by the Supreme Court.
Pro-Ukraine groups and pro-crypto communities on social media platforms like Twitter and Facebook have also contributed.
We have seen that crypto-technology is underpinned by a philosophy to evade government controls. Cryptocurrencies have specifically been developed to bypass the regulated financial system. These should be reason enough to treat them with caution, RBI Deputy Governor T Rabi Sankar said.
Sitharaman, in her Budget speech on February 1, had announced that Digital Rupee or Central Bank Digital Currency (CBDC) would be issued by the RBI in the coming fiscal year. She had also announced the government will levy 30 per cent tax on gains made from any other private digital assets from April 1.
The Reserve Bank of India and the Union government have not given any sort of recognition to cryptocurrencies and, therefore, they are not legal in the country right now, the Union minister of state for finance, who had come here to attend a function, told reporters.
Replying to the general discussion on Union Budget, the minister said, "I am not going to legalize it or ban it at this stage. Banning or not banning will come subsequently, when consultations give me input".
Cautioning investors, the governor said such assets have no underlying whatsoever, not even a tulip.
Ilya “Dutch” Lichtenstein (34) and his wife Heather Morgan (31) were arrested in Manhattan. Both have been accused of relying on various sophisticated techniques to launder stolen cryptocurrency.
A top government source, who wished not to be identified said, the digital currency issued by the RBI would be numbered in units, just like every fiat currency has an unique number.
Bitcoin, Ethereum, or NFT will never become legal tender. Crypto assets are assets whose value will be determined between two people. You can buy gold, diamond, crypto, but that will have not have the value authorization by the government, Finance Secretary said.
Budget 2022: With this, India will join certain countries that have their own central bank digital currency (CBDC) that refers to the virtual form of a fiat currency. She also said Rs 1 lakh crore financial assistance to states will be provided in 2022-23 to catalyse investments.
The tax proposals will come into effect from April 1 after the passage of the Union Budget in Parliament.
A consensus had emerged at the meeting for "progressive and forward-looking" steps while ensuring that an unregulated crypto market does not become an avenue of "money laundering and terror financing".
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