The Indian government has been providing an inconsistent stance on the regulation and legalization of cryptocurrencies for years, which has left most investors dizzy. Ever since the country’s central bank completely banned the use of digital assets in 2018, companies have been move out of India to set up shop elsewhere. Meanwhile, even when the ban was later lifted, the Reserve Bank of India has been consistently calling oneciting issues of consumer safety and market integrity.
On the other hand, the government has yet to provide its official position on the legality of the asset class, even after rrepeated calls throughout the industry to do. However, this could soon change with judicial pressure now acting as an impetus for the government to make a decision.
During a court hearing related to a Bitcoin scam earlier today, the Supreme Court of India order to the government to “make their position clear” on whether or not cryptocurrencies are illegal, according to local media. While the government representative responded that this will be done in due time, a long awaited invoice regarding the regulation of cryptocurrency has not yet reached parliament.
the GainBitcoin Scam in question involved a multi-level marketing scheme that promised a 10% monthly return on bitcoin investments, which was assessed to have raised around $2.65 billion.
While such crimes could play into the RBI’s argument about rampant crime within the digital asset industry, experts have previously claimed that regulation would in fact curb such illegal activities.
Regardless of this, the Supreme Court’s insistence came shortly after India imposed a 30% tax in virtual asset earnings last month, which includes any earnings made from cryptocurrencies or NFTs. Even when dejected by the high tax rate, many investors in the country provided this move will be followed by the legalization of the use of digital assets.
However, any such hope was soon crushed after Finance Minister Nirmala Sitharaman highlighted that taxation of the asset class does not mean it has been legalized, although many disputed how something illegal can be taxed. At the same time, the central bank has continued to express its negative outlook on the industry and has instead been in favor of a blanket ban similar to China’s.
While the two sides continue to fight over the status of cryptocurrencies in India, investors have been left in limbo as the country’s banks continue to await official instructions. Local reports have He suggested that banks are hesitant to provide support for crypto transactions even though consumer demand has been on the rise. Because of this, exchanges have to rely heavily on digital wallets to transact, often leading to higher fees.
“We will wait for regulatory clarity and then act accordingly, including in discussions with these exchanges,” one bank executive noted in the report, while another claimed that exchanges still needed to step up security measures like KYC to be formally listed. in the financial sector.