Benzinga | Sep 7, 2021 11:00AM EDT

India's New Draft Bill Will Treat Crypto As A Commodity: Report

A new draft bill from the government of India will treat cryptocurrencies as commodities, according to a report from The Economic Times.

What Happened: Sources close to the matter stated the new draft bill aims to categorize crypto on the basis of its use cases. As such, the asset class would be classified as a commodity for all purposes, including taxation.

The government's focus will reportedly be on classifying cryptocurrencies "based on the end-use of the asset class" for regulatory purposes.

After months of regulatory uncertainty, industry watchers welcomed the Indian government's move to regulate cryptocurrencies as opposed to an outright ban.

"This step is very positive for the crypto industry and I'm glad that the government is taking this direction towards crypto regulation," said Nischal Shetty, the founder, and CEO of Indian crypto exchange WazirX.

"This will bring more clarity for the entire industry and push more entrepreneurs into this sector. It will reduce the fear of VC investors wanting to invest in the crypto industry in India. For retail investors and traders, this will again boost confidence and bring in a sense of stability," he added.

However, not all investors were apprehensive about entering the Indian market amidst the unclear regulatory environment. Earlier this year, leading U.S.-based crypto exchange Coinbase Global Inc (NASDAQ:COIN) said it would establish a base in India for its operations.

"India has long been known as a hub for engineering and technology innovation, and we look forward to finding that world-class talent to help the Coinbase group develop new ways for our customers to interact with the crypto-economy,'' said Coinbase in a blog post.

BTC Price Action: Bitcoin (CRYPTO: BTC) was trading down 6.86% at $49.044.80 Tuesday morning at publication.

Photo: Ewan Kennedy on Unsplash