Fri. Mar 29th, 2024
cryptocurrency and Bitcoin legalizes in Ukraine

The hype around cryptocurrencies is increasing day by day. With crypto exchanges like CoinDCX touching billion-dollar valuations and crypto traders having invested a huge stake in the so-called asset class, crypto gaining traction among new investors, many things are at stake. Demand for cryptocurrencies is picking up momentum in India, crypto enthusiasts await clarity on how the central government will define this virtual currency in India.

El Salvador became the first country to accept bitcoin as a legal tender. It has again instigated the debate on whether bitcoin or such crypto should be legalised or should the financial system be decentralised?

So far, India is concerned, a bill on cryptocurrency is pending cabinet approval and is likely to be tabled in the next session of the Parliament.

Since the cryptocurrency has not been granted a legal tender status in India and taxation rules on the gains are obscure, how things will pan out relies on the policymakers. In the midst of this protracted wait, the Member of Parliament and Chairman of the Standing Committee on Finance Jayant Sinha on Money stated that it is critical to take a step back and consider how India should go with crypto finance.

Speaking at Crypto Asset Conference HODL 2021 held for the first time by the Internet and Mobile Association of India (IAMAI) and the Blockchain and Crypto Assets Council (BACC), Sinha said, “Crypto assets and decentralized finance have caused regulators around the world to focus on protection for consumers. Even as global standards evolve, the Indian situation will be different.” (Source: Moneycontrol)

“Countries where currencies are open and convertible both on the current and capital accounts, it is easier for them to let standards evolve. As far as India is concerned, we have an open current account, but not a capital account,” he added, referring to the capital account governed by the Reserve Bank of India (RBI) through the Foreign Exchange Management Act (FEMA).

“That is why, what is happening in advanced economies is not easily replicable to India, because we have restrictions on how you can trade foreign currencies in India,” Sinha said.

On the crypto bill regulating the asset-class pending cabinet approval, Sinha explained, “Once the law comes to the Parliament, typically there will be a discussion in committee on that legislation. One possibility is that it can come to the Standing Committee on Finance. Alternatively, it’s also possible to set up a select committee specially to look at crypto.”

Former RBI deputy governor R Gandhi said on Tuesday that crypto should be treated and regulated as a separate asset class, allowing governments throughout the world to effectively combat criminal activity linked with virtual currencies.

It will be a challenge to frame a policy that intelligibly counters or prevents the illegal activity associated with this so-called asset class. 

 

By Harshita Sharma

I bring to you updates from business, policy and economy spectrum.

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