Are large emerging economies more likely to gravitate toward blanket crypto bans? China has set a precedent, and now it appears that India might be considering pursuing a similar policy: A bill containing a proposed ban on all “private cryptocurrencies” will go before the country’s parliament sometime this winter. . The move is designed to clear the way for India’s central bank to advance its digital currency agenda. Whether a central bank-issued national digital currency can coexist with a thriving ‘private’ cryptocurrency market will be one of the central questions of the impending CBDC era, and it is clear that governments will be tempted to use their coercive authority to tilt the playing field in favor of the centralized money they control.
Here is the condensed version of the latest “Law Decoded” newsletter. If you want to know all the details of the political events of the last week, sign up for the full newsletter.
The Lok Sabha will study political options
One of the 26 new bills that the Lok Sabha, the lower house of the Indian parliament, will tackle during the winter session starting this week is the bill on cryptocurrencies and regulation of the national digital currency. The document outlines a set of measures aimed at facilitating the creation of a CBDC, including a proposal to ban all “private” digital assets, with some exceptions. The exact implications of the legislation remain the subject of much speculation, with analysts offering divergent interpretations of the scope of the possible ban. The market, however, responded in a more consolidated way, as cryptocurrency prices on the main Indian exchange, WazirX, plunged on the news.
Powell stays, Omarova is doubt
US President Joe Biden nominated Jerome Powell, current Chairman of the Board of Governors of the Federal Reserve System, for another four-year term at the helm of the US central bank. During one of his recent appearances before Congress, Powell stated that a blanket ban on China-style cryptocurrencies was not planned, but said that stablecoins needed more regulatory oversight. During Powell’s current term, which expires next February, the Federal Reserve has been actively exploring the possibility of issuing a CBDC (the digital dollar), as well as partnering with federal regulatory agencies for “policy sprints” focused on cryptocurrencies and aimed at identifying and closing loopholes in the regulation of digital assets.
NFTs will be taxed in South Korea
“Crypto-taxation” remains a very popular political issue in South Korea, as the government is sending mixed signals about whether new rules, including a 20% tax on income earned from cryptocurrencies, will take effect as of January 1. January 2022. The types of digital assets that fall within the scope of the updated tax code also remain unclear. While the country’s Financial Services Commission had previously stated that non-fungible tokens, or NFTs, are tax-exempt, the agency’s chairman stated the exact opposite last week. In addition, the regulator has introduced a series of strict tax declaration requirements for issuers of digital tokens, with jail terms for those who do not comply.
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