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Crypto Regulation: How India is keeping a cautious stance on the crypto sector, others should learn

Crypto Regulation: Cryptocurrencies have been in the limelight ever since the Supreme Court lifted a complete ban on them in early 2020. With the proliferation of exchanges and rapidly growing markets in 2021, no one is unaware of the name of cryptocurrencies. India has embraced the crypto world with open arms despite being a late entrant and today there are around 27 million Indians who hold crypto assets, mainly in Tier II and Tier III cities. Let us tell you that the number of active demat accounts in the country is also slightly more than that which have been present in the country for decades.

What steps has the center taken so far in the field of crypto
Cryptocurrency assets are a very interesting sign of currency and technology. A closer look at the steps taken by the Finance Ministry so far shows that our currency regulators look at the three aspects differently. This seems to be the root cause why India has so far offered mixed signals to the cryptocurrency regulator and has taken the time to protect the interests of the industry as well as investors.

Tax steps taken on crypto in the country
If we look closely at all the announcements made during the last Union Budget, most of the noise has been around the taxation of crypto assets. However, tax on crypto is a very welcome move which has been reiterated by the RBI since then. Yet it would be more correct to say that cryptocurrencies based on blockchain are more advanced than the current digital version of the currency and India is (as always) open-minded to adopt a new technology.

Crypto emerging as a legitimate digital asset
Looking at another aspect, treating it as an asset and levying TDS and tax on it can establish it as a legitimate asset. Although it can be argued whether the rates are higher or lower)? Should policy makers treat them on par with STCG and LTCG, taxation on crypto is the regulator’s way of approving it. This also indicates that it is now perfectly legal for anyone to trade and own crypto. These are early days and with the passage of time and with increasing understanding, the taxation will gradually become more investor friendly.

investors should not worry
This also brings us to the third aspect of crypto as a currency in which our regulators, unlike some countries, have been strong. Cryptocurrencies are a highly liquid store of value, and we need to ensure that it can treat investors in India and abroad alike. as well as ensure that there is no natural shortage of crypto

India and crypto – what’s the future
The Finance Minister last month talked about international cooperation on crypto. India should look no further than its neighbors Singapore and Dubai, the two countries that are now rightfully at the forefront of leading the crypto revolution. Cryptocurrency exhibits a very interesting dual behavior in that on the one hand it is visible to all, but on the other hand it is not responsible as long as it remains based on the blockchain. This is really the crux of the controversy and the government should create a framework, partner with exchanges and issue licenses so that companies like us (and others) can act as facilitators of our regulators and bring blockchain technology to India. to bring forward with.

The Status of Crypto in Other Countries
Crypto has received mixed reactions from various countries so far. El Salvador became the first country to adopt bitcoin as legal tender alongside the US dollar, however, it suffered heavy losses. Despite criticism from the International Monetary Fund (IMF) and several credit agencies, the Central American nation continued to add BTC to its national reserves and even revealed plans to set up a crypto trading hub called Bitcoin City. . However, due to the recent drop in BTC prices and the overall crypto market slump, the country’s investments are losing value which are estimated to be over $50 million. On the other hand is China, which has dramatically reversed its stance on the crypto platform and its various aspects, so much so that crypto traders and miners eventually had to move out of the country and move to other South Asian countries to continue their business. had to install.

Vigilance on crypto proves to be good for India
India’s cautious approach to cryptocurrency and its various aspects can be considered as a learning curve for other governments. Before taking the decision to adopt or ban this field completely, it is very important to do dedicated research which the Indian government is doing.

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