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India will soon have its own set of rules for Bitcoin and other cryptocurrencies. The responsibilities of various authorities have been confirmed, a high-ranking official disclosed. Significant institutions are currently finalizing a comprehensive government guideline on cryptocurrencies. Meanwhile, the Legislative body of the Indian crypto community, have nullified worries of an imminent ban.
Crypto Guidelines Being Framed
The Chairman of India’s Securities and Exchange Board told reporters on Saturday (10th February 2018) that “The responsibilities of different regulators regarding cryptocurrencies have been decided already”. In the middle of continued volatility in the marketplace & rising concern about investors’ protection, Ajay Tyagi stated that the expected regulations should be out soon. He declined to provide additional information, insisting bureaucrats would do that after the comprehensive government guidelines are finalized and declared.
Tyagi’s remarks just came after the Indian Finance Minister Arun Jaitley presented 2018 Budget in this month. While explaining its key policies, Jaitley reaffirmed a previously stated point: “Cryptocurrency is not acknowledged as legal tender in India and the government is going to take all the measures to abolish its utilization in financing illegal activities. Indian Government will support blockchain technology in payment systems.”
The Board’s chairman disclosed that next day, SEBI has enquired the Department of Economic Affairs (DEA) to call up a meeting regarding regulation of cryptocurrencies. Ajay Tyagi was apparently referring to the panel set up to recommend a regulatory framework after investigating about cryptocurrencies and their implication. “We have actually decided which regulator will do what and the committee should come out with the regulations very soon”, he added. Tyagi assured his agency “will completely contribute to this” objective and insisted, “We want guidelines to be framed first.”
In the month of December the Finance Ministry of India declared that it was forming a special panel to look after developments that includes the volume of Bitcoin related trade, and helps out to speed up the process of implementing crypto guidelines. Representatives of DEA, the Reserve Bank of India, and the Income Tax Department were invited to join the panel.
Anticipation in India, but no Fear
The new regulations were expected by the end of March. They are going to involve anti-money laundering actions and measures to avoid tax evasion. Suspecting dubious transactions, Income tax department has targeted cryptocurrency exchanges in the nation and banks have suspended the accounts of those who were involved in crypto transactions. More recently, India’s Income Tax Department declared that it had issued notices to 100,000 cryptocurrency investors after monitoring the functions of major trading platforms.
The crypto community of India expected more clarity from 2018 Budget in regards to taxation of cryptocurrency incomes, profits & transactions. Trading and mining companies have also asked for comprehensible policy regulations from the government. However, the Finance Minister reaffirmed the position and they didn’t give the answers for many outstanding questions. Some notices an imminent threat of an absolute ban of Bitcoin in his vow to “eliminate” cryptocurrencies. Others point out that he actually meant their use for illegal reasons.
Head of India’s Blockchain and Cryptocurrency Committee (BACC) Ajeet Khurana just stated that he was happy that crypto’s were mentioned in the state budget. “As the finance minister said that cryptocurrency is not an official tender that is perfectly logical. Every country, barring Japan, has shown this attitude. It doesn’t signify crypto trading is illegitimate, but it comes with its own threats like any other investment asset in the marketplace.”
He further stated:
“THERE ARE VARIOUS DIMENSIONS TO BITCOIN TECHNOLOGY, SECURITY & PRIVACY. IT IS ESSENTIAL TO BE AWARE OF EVERY CHARACTERISTIC, TO UNDERSTAND BITCOIN BETTER AND MAKE INFORMED DECISIONS WHILE TRADING.”
In the absence of official information, there have been several efforts to gauge the Indian crypto marketplace. Ajeet Khurana stated that there are at least five million vigorous traders in India that make use of existing regulated banking channels. An Indonesian company carried out an analysis in six countries, which revealed that Indians were quite positive about the future of cryptocurrencies. The Indian branch of a famous job site claimed in a report that as of September last year there were 1.5 million wallet account holders in India. The crypto-related job postings on its platform have increased by 290% in just six months.
The Indian crypto zone certainly looks “too big to fail” now. Both the government in Delhi & the Indian crypto community appears to recognize the fact which is the major take away from all these steps.