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What Does The Future Of Crypto In India Seem Like?

One more year has passed without India determining how to govern crypto currencies.

The schism amongst the administration and the Reserve Bank of India is still present.

The Reserve Bank of India (RBI) is worried that cryptos represent financial threats to the nation’s macroeconomic security. The administration, on the other hand, is allegedly considering a more accommodating attitude instead of a blanket ban on all private coins.

We do not quite understand what the draught Bill to govern cryptocurrency contains.

However, Indian cryptocurrency exchanges have exposed the inquiries being posed by the authorities. In general, the debate over how to oversee cryptocurrency revolves on these issues.

Which agency is most suited to regulate cryptocurrency? In Gujarat’s GIFT City, would there be a SEBI, RBI, or perhaps the International Financial Services Authority (IFSC)? What exactly are crypto assets? How many local and overseas crypto exchanges be established in India? How should cryptocurrency transactions be taxed? How will fresh cryptocurrencies be permitted to be listed on exchanges? Do cross-border bitcoin transactions breach the regulations of the Foreign Exchange Management Act (FEMA)?

A number of solutions have been presented. The Liberalised Remittance Scheme, or LRS, established by the FEMA Act, permits for external remittances of up to $250,000 per Indian every year. Nevertheless, there is fear that because bitcoin allows users to deal secretly, the authorities would be unable to monitor the magnitude of transborder cash movements. This may wreak havoc on the country’s present account imbalance and foreign exchange reserves.

Policy 4.0, a crypto and blockchain-focused research tank, has suggested The India Wallet as a solution.

This would be a KYC-compliant wallet that must be linked by all local and foreign cryptocurrency exchanges in order to provide trading services to Indian consumers. It would assist authorities in differentiating between local and cross-border transactions.

Balaji Srinivasan, an erstwhile Coinbase CTO, and angel investor, also advises that India classify cryptocurrency as “foreign assets” within FEMA guidelines. The RBI might utilize FEMA to govern cryptocurrency exchanges as ‘authorized persons’ under the Act, allowing them to deal in overseas funds. Most industrialized nations, including Australia, Canada, Japan, South Korea, the EU, and the United States, have integrated crypto-asset trading into their anti-money washing frameworks.

Notwithstanding legal ambiguity, crypto has thrived in India, with an increasing number of consumers flocking to these new-age investment products before venturing into the stock market.

In India, there are around 15-20 million cryptocurrency investors. The total value of crypto holdings is $5.33 billion. Indian crypto exchanges like WazirX, which has 10 million registered customers, and CoinSwitch Kuber, which has 11 million, have greater registered members than Zerodha, the nation’s top brokerage, which has approximately seven million.

We called out to Zebpay, a cryptocurrency exchange, to learn how, notwithstanding regulatory uncertainties, the Indian crypto ecosystem has evolved this year.

It is critical to recognize that the discussion around crypto regulation is not restricted to bitcoin. There is non-fungible tokens (NFTs), metaverse, and Web3.0 ecosystem that is utilising blockchain technology and crypto as a means of payment.

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