Crypto & NFT Law in India

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CRYPTO & NFT LAW IN INDIA

* 6 Broad Types of Cryptos *

✔︎ Non-fiat-backed currencies e.g. Bitcoin (BTC), Monero (XMR)
✔︎ Fiat-backed currencies e.g. Tether (USDT)
✔︎ Utility coins e.g. Ether (ETH), Filecoin (FIL)
✔︎ Governance tokens e.g. Uniswap (UNI)
✔︎ NFTs not backed by tangible assets
✔︎ NFTs backed by tangible assets

* Virtual Digital Assets (VDAs) *

Categories 1-5 from above are Virtual Digital Assets (VDAs) under section 2(47A) of the Income-tax Act.

* What are not VDAs? *

The Government has issued a notification saying that the following are not considered VDAs:

✔︎ Gift cards or vouchers
✔︎ Mileage points
✔︎ Reward points or loyalty card
✔︎ Subscription to websites or platforms or application

* What are Non-Fungible Tokens (NFTs)? *

NFTs are digital proof-of-ownership of an underlying asset such as:

✔︎ digital art
✔︎ collectibles
✔︎ domain names
✔︎ virtual game items
✔︎ physical assets

* NFTs backed by tangible assets *

The Government has issued a notification that an NFT will not be considered a VDA if it meets 2 conditions:

✔︎ The transfer of the NFT results in the transfer of ownership of an underlying tangible asset.

✔︎ The transfer of ownership of such underlying tangible assets is legally enforceable.

To learn more about NFTs and VDAs, join ASCL’s Program in Future Law.

Link – https://www.asianlaws.org/future-law.php

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