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
✔︎ 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.
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