From my perspective, India must be among a few countries to regulate the cryptocurrency market in order to welcome new opportunities for businesses, start-ups, and all kinds of investors. Through a varied approach adopted by several countries to regulate crypto, India has the potential to do the same.
Digital money that works on the basis of blockchain technology is called cryptocurrency. While there are thousands of cryptocurrencies in transmission, Bitcoin and Ethereum are the most popular ones. Businesses all over the world are aggressively using these digital assets for transactional, operational, and serviceable purposes. Just like every other invention, there are unknown risks involved. But, there are strong incentives too.
Considering both sides of cryptocurrency – risky and stimulus, many Indians have invested their resources in the crypto market. The data from crypto exchanges reports that there are approximately 1.5 crore Indians who have invested in cryptocurrencies, collectively holding a sum of Rs. 15,000 crores. Additionally, 350 start-ups operate in crypto and blockchain. Crypto industry players including CoinSwitch Kuber, WazirX, CoinDCX, Zebpay and others have seen a significant hike in demand over some time. But, unless there’s a regulated law and an official view on the cryptosystem, it is no different than gambling.
In order to turn the illegal system into legal, levy and recover tax on money earned by trading with crypto exchanges, a regulatory bill titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’, was expected to be listed in the winter session of the parliament ending on December 22. Unfortunately, the much-anticipated law was dropped in the final days of the session. Reportedly, the government wanted to hold wider consultations on the matter. In my opinion, the government is far-fetched from tackling the consultations until the Budget Sessions, or the next session of parliament.
The bill needs more framework and mechanism to prevent the citizens using crypto exchanges from becoming prey to financial and economic misfortune. Usually, people who do not understand the concept of policy and legal ramifications are victims of such disasters. Considering the disadvantages, in 2018, the central bank of India, the Reserve Bank of India (RBI), prohibited other banks from being captive of crypto transactions until the ban was lifted by the Supreme Court after two long years.
Elaborating on the rise and advantages of cryptocurrencies in business, I’d like to inform you that it presents a host of opportunities. It enables simple, secure, and real-time money transactions. It is an effective substitute for balancing resources to cash. From my personal standpoint, Cryptocurrencies are an investable asset that has earlier performed exceedingly well and has the potential to do the same for the coming years.
While Indian businesses, old, and new investors seek regulated cryptocurrencies, the committee members say that the common viewpoint is to tally with the global standards to make a regulatory law that’s correctly constructed.
Currently, the proposed law is based on several provisions. One of them is making the Securities and Exchange Board of India (SEBI) the regulatory authority for cryptocurrencies amidst government plans to consider them as financial assets. It also includes a measure to make citizens using cryptocurrency and transactions declare their assets. If not, they may face jail time or have to pay a fine.
I think from the standpoint of investors, in order to make the cryptocurrency market a safe and secured environment, its regulation is quite important. In all likelihood, the upcoming law may set a balance between investors while preventing market manipulation, online fraud and security risks and money laundering.