crypto consultation paper: Crypto community high on hopes as govt finalises consultation paper

Synopsis

The crypto industry and players cheered the update from the central official and are hopeful of some positive news from the government. Many expect that the government will ensure steps to support the ecosystem.

“The entire ecosystem is evolving rapidly and there is a need for a multi-country consensus for the ecosystem to flourish while keeping in mind the interests of individual countriesNew Delhi: The government will finalise a consultation paper on cryptocurrencies soon. However, the law and regulatory framework may take more time to be put in place.

According to Economic Affairs Secretary Ajay Seth, the government is taking inputs from various stakeholders, including the World Bank and International Monetary Fund (IMF).

The government bureaucrat said that the consultation paper is almost ready and the government has gone deep into it. Seth remained tight-lipped over the timeline, but the sources suggest that it can be tabled in August this year.
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The crypto industry and players cheered the update from the central official and are hopeful of some positive news from the government. Many expect that the government will ensure steps to support the ecosystem.

Aritra Sarkhel, Director, Public Policy at WazirX, said: “We hope that the paper represents a need for global cooperation between countries to formulate regulations on crypto and encompasses various tenets of the Web3 ecosystem that includes centralized exchanges and pure-play web3 product companies.

However, its impact on the upcoming regulation in India is yet to be gauged, he added.

“The entire ecosystem is evolving rapidly and there is a need for a multi-country consensus for the ecosystem to flourish while keeping in mind the interests of individual countries.”

However, the economic affairs secretary said that a law on cryptocurrencies may take some more time as India is waiting for an international framework on the same.

The government was scheduled to table the Bill for regulations on private cryptocurrencies during the Winter Session of the Parliament in December 2021. However, it was not introduced back then.

India’s consultation paper on cryptocurrencies should cover regulatory frameworks from unilateral and multilateral perspectives. The industry is highly hopeful on the front from the state.

Avinash Shekhar, CEO, ZebPay, said that this would set the stage for investor protection, industry-wide best practices and enforcement of the same, prevention of illicit use of cryptocurrencies and promotion of sectoral innovation and growth.

“We expect the government to take a measured, progressive stance that takes into account the best interests of all players in the category, at both individual and institutional levels,” said Shekhar.

Despite the high hopes of the domestic crypto industry, the government’s stance has not been very supportive so far and the latest steps taken are the testimony of the same.

In the 2022-23 Budget, Finance Minister Nirmala Sitharaman announced a 30 per cent tax on the gains arising from the crypto assets, along with a 1 per cent tax at source on all crypto transactions.

However, the Centre clarified that taxation does not mean legal validity for cryptos. The government has since called for a global framework for taxing virtual digital assets.

The Reserve Bank of India (RBI) has been a vocal critic of private crypto assets. The central bank is expected to have quite a good say in the upcoming consultation paper, which will provide more clarity on India’s official stance.

Vijay Pravin Maharajan, CEO & Founder, bitsCrunch, said that the focus on bringing a global framework to the crypto industry rather than taking an individual stand definitely helps to connect with a broader range of digital assets.

“We can expect a collective and reasonable decision in favour of crypto enthusiasts and investors. The industry can expect a positive sign across all digital assets that can contribute to economic growth,” he added.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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Updated: 05/31/2022 — 10:00