The Reserve Bank of India has long condemned the use of cryptocurrencies, but unlike the Supreme Court that struck down a 2018 bill last year, the Indian government’s stance on cryptocurrencies has been highly uncertain.
On the other hand, high-ranking sources tracking the government’s position say it has moved away from it The idea of a complete ban. On the other hand, more banks have begun to block crypto-related companies from accessing their services, including ICICI Bank, Paytm Payments, Yes Bank and most recently IDFC First Bank.
The position of the Reserve Bank of India (RBI) is understandable. As the body responsible for ensuring that the country can absorb financial shocks, it has repeatedly pointed out the dangers of using cryptocurrencies. Some banks still cite 2018 circulate as a reason freeze Accounts that deal in cryptocurrency despite having the Reserve Bank of India Canceled it earlier this year.
According to reports, the Indian market regulator, the Securities and Exchange Board of India, will oversee legislation for the crypto sector once Bitcoin (BTC) becomes classified as an asset class. The sources also indicate that an expert committee is being formed to study the technology and that the Monsoon Parliament session will discuss the introduction of the cryptocurrency regulation bill.
India has taken drastic measures to limit the amount of cash that is not taxed, including demonizing its 500 and 1,000 rupee notes in 2016. One of the Indian government’s biggest concerns is how cryptocurrency enables a degree of anonymity to its users and how it can be used to finance Terrorism, money laundering, and aiding other forms of criminal activity. However, this raises the question of whether crypto investors should pay the price for the inefficiency of digital law enforcement.
“Since the March 2020 Supreme Court ruling, crypto-related trading has gained tremendous traction in India, particularly among the millennial and Generation Z investor community,” Sumit Gupta, CEO of crypto exchanges in India, told Cointelegraph. Well-intentioned regulations will help strengthen the cryptocurrency ecosystem in our country.
In March, Minister of State Finance Anurag Singh Thakur advertiser That the government was collecting income tax on cryptocurrency winnings and even GST from exchanges. However, he also noted that the government does not keep any data on crypto earnings since there is no way to capture such information. Gupta added:
“We will continue to collaborate with other peers in the crypto industry to present our collective suggestions to the authorities.”
Shivam Thakral, CEO of BuyUcoin – one of India’s largest exchanges – believes the Reserve Bank of India will eventually come. “I strongly believe that the Reserve Bank of India is not opposed to any financial innovation, which has the potential to boost the Indian economy and create jobs for young people,” he said, adding: “The Reserve Bank of India’s main concerns are related to the misuse of powerful crypto assets you have.”
However, Siddharth Sujani, founder and CEO of cryptocurrency research firm Crebaco Global, is more optimistic about India’s readiness for blockchain technology. “Technologically, we’re ready. It’s easy to live in structured environments, [and] It will enable the government to monitor crypto transactions,” he said, adding, “India needs a dedicated department to regulate the crypto space. Not regulating them will only encourage the black market.” Thakral added:
“I have full confidence in the RBI, and we can expect clarity on the regulatory guidelines for crypto assets soon.”
The country’s approach to classifying cryptocurrencies as an asset class is positive news for the space as it matches the ways various other countries have created better frameworks for decentralized currencies.
“The Australian Taxation Office has been looking at cryptocurrencies as a digital asset for some time now,” said Michael Swan, founding member and chief commercial officer of asset custody services firm Unido. He further opined, “We see the steps taken by India as a natural progress and consistent with global sentiment.”
However, there are concerns surrounding the cryptocurrency regulation bill that will be introduced in Parliament. Following the RBI circular in 2018, the government created a committee to report on news related to the crypto space. In 2019, this committee recommended a blanket ban on cryptocurrencies.
youth and hunger
India’s finance minister has said that India will do Do not close all options for cryptocurrency, which some have interpreted as a possible ban on private cryptocurrencies, paving the way for a state-backed central bank digital currency (CBDC). However, with the younger generation flocking to digital assets as the old did with gold, this could be a huge missed opportunity for millennials and Gen Z people just entering the job market.
The inability of the Reserve Bank of India to provide the Supreme Court with sufficient evidence that cryptocurrencies should be banned means there is some pressure on the Indian authorities to allow cryptocurrencies in the country. However, Indian investors, especially the younger ones, are being pushed from confusion to indignant as the opaque regulation brings fear of losing the offerings of the giant cryptocurrency markets.
India is one of the smallest countries with a large number of early adopters of technology. Currently, we are seeing more and more people between the ages of 24 and 40 adopting crypto,” Gupta said. However, when asked if India’s plans for central bank digital currencies see any basis, he declined to comment. Sujani added:
India needs a dedicated department to organize the crypto space. Not regulating them will only encourage the black market.”
“After the Reserve Bank of India’s handbook outlining potential plans for a central bank digital currency, there has been no media statement about the official Central Bank of India,” Thackeral said, adding, “We have seen reports of major banks moving towards blockchain, and that could be a sign of the status quo.” Banks are the foundation for making digital central bank currencies a reality.”
Indian investors appear confident of the industry’s long-term growth despite the recent market crash, and market experts and leaders seem optimistic about how the authorities will legitimize cryptocurrency in the country. Although the progress is slow, things seem to be moving, but with a market of close to a billion users, India’s stance on cryptocurrency is causing global concern.