Consultation paper on crypto almost ready, says Economic Affairs Secretary Ajay Seth

(Image: PTI)

The government is almost ready with its consultation paper on crypto, Economic Affairs Secretary Ajay Seth has said.

"Our consultation paper is fairly ready. We have gone into a deep dive into this," Seth told reporters on May 30 on the sidelines of an event.

The government has refused to make public its stance on crypto so far, with confusion even reigning over their classification: whether they are financial assets or fall in some other category, such as commodities.

However, while it has been engaging with stakeholders to cement its stance, the Centre has imposed taxes on crypto. The 2022 Budget proposed a 1 percent Tax Deducted at Source on all crypto transactions, while a 30 percent tax was imposed on profits made from crypto sales.

The taxes, which came into effect on April 1, does not make crypto legal, the government has asserted, with Finance Minister Nirmala Sitharaman saying it was the government's "sovereign right" to tax crypto transactions.

Meanwhile, the Reserve Bank of India (RBI) has hit out at cryptocurrencies, saying they were a threat to the financial system and would never be legal tender.

On February 10, RBI Governor Shaktikanta Das was withering in his assessment of private cryptocurrencies, saying they had no underlying asset, "not even a tulip".

Seth also reiterated the government's position on the need for a global consensus on crypto, calling for a broad framework of participation of all countries.

In this matter, the government is simultaneously starting work on global crypto regulations, Seth said, without elaborating any further.