There has been a recent surge of eagerness among Indian crypto firms and investors, sparked by the G20 members’ drive for a worldwide framework for regulating crypto. For a long period, domestic Indian crypto exchanges have been plagued by ambiguity, and the recent crypto regulatory recommendations by the International Monetary Fund(IMF) and Financial Stability Board (FSB) have created a glimmer of hope for a clearer regulatory framework.
Kiran Mysore Vivekananda, CoinDCX’s Chief Public Policy Officer, well acclaimed the synthesis paper produced by the IMF-FSB. He noted the paper provides high-level suggestions touching on several essential aspects like taxonomy of crypto, consumer protection, operational standards for crypto businesses, and a unified taxation system.
However, the idea of self-regulation is not without its opponents. Critics suggest that such a system can lead to lack of oversight, and potential misuse. Yet, specific examples, such as Japan’s successful implementation, and support from India’s Reserve Bank Governor Shaktikanta Das have bolstered faith in the approach.
But when it comes to taxation, Vivekananda voiced his concerns over the heavy taxes imposed on crypto gains by the Indian government. He pointed out that the introduction of Tax Deducted at Source (TDS) was intended to discourage crypto investment but instead, a report by Chainalysis depicted India as leading in crypto adoption. The TDS measure seemingly did not diminish enthusiasm for crypto investments, rather dwelled a contrary scenario.
Despite the high taxes, retail investors continue to engage in crypto trade using foreign Peer-to-Peer services. It is critical to highlight though, that these engagements have been shifting away from centralized exchanges in favour of utilizing foreign platforms to evade the substantial tax impositions. The current predicament in the domestic arena is both perplexing and challenging for local investors.
It is evident that India is endeavoring an amicable regulatory approach towards crypto. Concurrently, domestic players await a clearer framework, and there’s a sense of anticipation for a constructive regulatory environment across the Indian crypto-sphere. Despite the cautious optimism, the tension between the wishes of the crypto community, the principles of self-regulation and government’s cautious approach to taxation remain unaddressed. A balanced solution would require further extensive discourse and a strong commitment to global consensus and cooperation.
Source: Cryptonews
