India needs to establish cryptocurrency rules to resolve regulatory uncertainty, protect investors and boost its crypto sector, CoinSwitch CEO Ashish Singhal said Sunday.
India, a complicated country for crypto companies
Although India’s central bank supported banning cryptocurrencies due to financial stability risks, the federal government’s decision to tax the revenue they generate was interpreted by the industry as a sign of acceptance by New Delhi. Last I heard, the GST board was planning a 28% capital gains tax on cryptocurrencies.
” Users don’t know what will happen to their holdings – will the government ban, not ban, how will it be regulated ? “, said to Reuters Singhal, a former Amazon engineer who co-founded CoinSwitch, at the World Economic Forum in Davos.
CoinSwitch, which is valued at $1.9 billion, says it is India’s largest crypto company with over 18 million users. The company, based in Bengaluru, India’s main technology hub, is backed by Andreessen Horowitz, Tiger Global and Coinbase Ventures.
India’s central bank has expressed “seriouss worries about private cryptocurrencies, but Prime Minister Narendra Modi said in December that these emerging technologies should be used to strengthen democracy, not undermine it.
In India, stock exchanges often find it difficult to partner with banks to enable the transfer of funds. Last April, concerns had emerged in India, during the suspension of rupee deposits on WazirX and CoinSwitch.
Although no official data is available on the size of the Indian cryptocurrency market, CoinSwitch estimates the number of investors to be as high as 20 million, with total holdings of around $6 billion. Indeed, the Indian population is particularly interested and educated about the new uses of cryptocurrencies.
Regulatory uncertainty was widely felt. In April, Coinbase, the largest cryptocurrency exchange in the United States, launched in India, but within days it paused the use of a state-backed interbank funds transfer service. .
Coinbase CEO Brian Armstrong later said in May that the move was made due to “informal pressure” from India’s central bank.
All spheres of cryptocurrency are covered by Indian regulations. Indeed, even a Bollywood star is in the crosshairs of the tax authorities after an NFT sale.
Many companies have made the choice to relocate, in order to go to countries where the regulations are clear, because poor regulations are a problem. But the lack of regulation is even more complicated to manage for companies that want to grow over the long term and do not know how to protect themselves from future regulations.
India is therefore in a complicated situation, with a gigantic market and very interested in these new technologies. But at the same time a strict regulation and who does not see how cryptocurrencies can bring anything to the government.
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Alexis Patin
Passionate about geopolitics, economy, cryptocurrency, Eurasia and travel! (as far east as possible), crypto-trader for 4 years.
