As one of the prolific members of the G20 summit, India appears to be taking conscientious strides towards a more robust and comprehensive legislation surrounding cryptocurrencies. Instead of enforcing an outright ban on these digital assets, India has adopted a regulation-focused approach recommended by leading global financial stalwarts, the International Monetary Fund (IMF) and the Financial Stability Board (FSB).
Indeed, this paradigm shift towards extensive legal regulations in the crypto market suggests the global recognition of the futility of a blanket ban on cryptocurrencies. Major global powers including the United States and Europe have already initiated specific regulations in the area, reassuring the world of the potential of regulated crypto markets in mitigating illegal activities and scams.
India’s tactical approach manifests in its proposed five-point crypto ordinance which includes provisions for stricter Know Your Customer standards for crypto entities in consonance with international anti-money laundering standards and the Foreign Account Tax Compliance Act (FATCA).
Moreover, crypto platforms will be mandated to provide Proof-of-reserve audits in real-time basis to its regulators, marking a significant move towards greater accountability and transparency in crypto transactions. The framework also proposes a harmonised taxation policy among nations, a move that invariably affects the Bitcoin market.
An intriguing aspect in these guidelines is the potential elevation of crypto exchanges to the reputed status of authorised dealers under the directives of the Reserve Bank of India (RBI), akin to traditional banking institutions. The orchestration of such an alignment hints towards the acceptance of the crypto industry into the mainstream financial sector.
However, the introduction of stringent positions such as a mandatory Money Laundering Reporting Officer for crypto platforms echoes the governmental concerns towards illicit activities involving crypto assets.
While it’s promising to envision a future where crypto assets function harmoniously within the regulatory confines of a country’s financial ecosystem, it is worth remembering that the journey towards acceptance is fraught with uncertainties. The path towards robust regulation may not be entirely smooth, as governments grapple with the constantly evolving nature of the technology involved and the associated risks.
The Indian government has taken a commendable step, but only time will tell whether these provisions envisioned for the crypto market are operational and consistent with its fast-paced world, or whether adjustments will need to be made to better cater to the global cryptographic community.
Source: Cointelegraph
