India emerged as the fastest-growing crypto market in the world this year. A Bill to regulate it remained a work in progress. So, what's puzzling the government? And how was the year 2021 for cryptos?
Another year has gone by without India getting a firm hold over how to regulate cryptocurrencies.
The divide between the government and the Reserve Bank of India persists.
The RBI is concerned that cryptocurrencies pose financial risks to the country’s macroeconomic stability. The government, however, is reportedly looking at a more accommodative approach, rather than a ban on all private cryptocurrencies.
We don’t know yet what’s inside the proposed Bill to regulate cryptocurrencies.
But Indian crypto exchanges have revealed the questions they’re being asked by the government. Broadly, the conversation over how to regulate crypto is around these queries.
Which is the best authority to regulate crypto? SEBI, RBI or even the International Financial Services Authority (IFSC) in Gujarat’s GIFT City? What are crypto assets? How can crypto exchanges, both domestic and foreign, be registered in India? How to tax crypto transactions? How will exchanges be allowed to list new cryptocurrencies? Do cross-border cryptocurrency transactions violate Foreign Exchange Management Act (FEMA) rules?
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