India’s Prime Minister Modi has urged ‘democratic countries’ to cooperate on cryptography
India’s regulatory stance on cryptocurrency is, at best, ambiguous. This is particularly true given the country’s ongoing struggle to reach an agreement on the categorization and legality of the innovative asset class. Following a flurry of cabinet meetings, industry briefings, and increased financial worries, the country’s Prime Minister has recently been more outspoken about the same.
PM Narendra Modi stressed the need of democratic countries cooperating to maximise the benefits of cryptocurrencies and blockchain technology in an online address to the Sydney Dialogue. He warned against their being used for improper purposes in the process.
PM Modi also alluded to the use of cryptocurrency for money laundering and terrorist funding earlier this week when chairing a high-level meeting. The overall atmosphere around the conference suggested that significant regulatory action was imminent, although progressive and forward-looking.
The Indian government has already taken significant attempts to provide an appropriate regulatory framework for the burgeoning business. It has convened multiple high-level meetings with the Central Bank (RBI), the Finance Ministry, and the Interior Ministry, as well as crypto specialists and important industry participants from both inside and outside the nation.
In contrast to certain ministers’ neutrality, RBI Governor Shaktikanta Das remains cautious. Reiterating his position on Wednesday, the executive highlighted that legalising the trading of cryptos might represent a severe danger to any financial system due to their lack of central bank regulation.
The Economic Times stated the same day that the nation is prepared to prohibit cryptocurrency transactions and payments while designating them as assets comparable to precious metals, stocks, and bonds. According to the publication’s sources, the government may circumvent comprehensive ban using this strategy. As a result, it is possible that crypto-exchanges and platforms may be unable to onboard new investors.
Additionally, local media outlets suggest that the government is considering reclassifying bitcoin exchanges as e-commerce websites. This would significantly cut the Goods and Services Tax (GST) paid by consumers every transaction from 18% to 1%.
With India’s regulatory environment being unstable at best, the next few weeks and months might be critical. During the next session of the Indian parliament, a cryptocurrency law is expected to be introduced. Many expect that this will provide some reprieve and stability for investors and businesses.
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