The Economic Times recently reported that cryptocurrency exchanges in India are, “planning to create a central repository of users that will help create and maintain a real-time record of transactions.”

Ajeet Khurana, head of the Blockchain and Cryptocurrency Committee (BACC) pointed out that:

“This is one of the proposals we are planning to submit to the government committee which is looking into the issue of cryptocurrency.”

Another industry expert revealed to the publication that:

“The purchase data of buyers and sellers of the virtual currency can then be traced through either the Aadhaar ID or the Permanent Account Number (PAN) of the user. Details such as the total number of cryptocurrencies held, the value thereof as well as the pattern of buying and selling by individual users will be available through the central repository.”

The 12-digit Aadhaar number based on the demographic and biometric data of Indian residents have already been issued nationally. Aadhaar has been heralded as the largest biometric ID system of the world comprising more than 1.19 billion enrolled members as recorded on November 2017 end.

PAN on the other hand is a 10-character unique code which is used as an identification mode of families, individuals and corporates paying Income Tax. It is also issued to foreign nationals and NRI’s holding a valid visa. Khurana added that the proposal shall be submitted later this week by BACC to the government committee headed by Economic Affairs Secretary SC Garg. The recommendations of the government panel shall be submitted by March and a regulator will be appointed to keep an eye over cryptocurrency trading in India as described by the news outlet.

Cryptocurrrency Regulations In India

As mentioned above as well, a government committee has been formed which is being headed by Economic Affairs Secretary SC Garg which will look into the functioning of cryptocurrency exchanges in India as well as regulation of cryptocurrencies in India.

As of now Finance Mininster Shri Arun Jaitley mentioned in his Union Budget Speech 2018 that “Cryptocurrencies are not considered as legal tender in India “. But this does not means that cryptocurrencies are banned in India.

By not recognising cryptocurrencies as legal tender in India simply means that digital currencies like Bitcoin, Ethereum, etc cannot be used to buy/sell goods and services.

Also Read: Regulation Rules On Cryptocurrencies In India To Be Out Soon-Says SEBI Chairman Ajay Tygai

Khurana revealed last week that the Indian government is trying to bring about clear regulations concerning the functioning of cryptocurrency exchanges in India . Firstpost quoted him saying that approximately 5 million Indians are either using cryptocurrencies presently or have used the same previously, “And this number is growing.”

He further detailed that:

“Our exchange participants neither allow foreigners to participate nor allow foreign exchanges to come in. We are working independently from the world. Despite that, our market mechanism is very vibrant. If you were to ever look at the order book of cryptocurrency exchanges and compare them to forex or stock exchanges, you would feel they are operating similarly. Regulatory framework on cryptocurrencies in India is taking time because of the nature of the technological innovation and confusion over who should regulate it.”

Taxation on Cryptocurrencies Such As Bitcoin In India

As per the latest updates, the Central Board of Direct Taxes will levy Capital Gain Tax on the profits earned in trading of cryptocurrencies.

Source- CNBC

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Tarunima Ghosh Laha

Tarunima Ghosh Laha is a Finance Post Grad from St. Xaviers who believes Finance is more than just Balance Sheets and Ledger creation. This filmy bookworm who believes she was a sloth in past life also nourishes a penchant of owning a private zoo someday. Equipped with a laptop and online Lexicon she is all set to give finance a glamorous makeover in the form of exciting writeups with bang on info and flashy new words.