India’s crypto industry is bracing itself for the fallout from changes to the country’s tax code.
Be[In]Crypto spoke to Pratik Gauri, CEO, and co-founder of blockchain startup 5ire for his take on the government’s legislative approach.
“I do not think industry players have much choice in the matter. Taxation and regulation of assets is the government’s purview and they have a free hand in how things are taxed or regulated.
“In addition, this is a fairly new legal playground and both the judiciary and the legislature are feeling their way through it. So, there are plenty of surprises left in store.”
Some crypto players in India are also worried that the new rules will further discourage users from trading in the asset class.
And several opposition leaders and industry players have urged the government to reveal its crypto framework to clear up confusion.
Appointing a crypto supervisor
Rajeev Chandrasekhar, minister for electronics and IT, said recently that there is a recognition that digital virtual assets should now be accepted as an asset class.
“There are some questions around existing crypto exchanges, crypto brokers, p2p types of trades on cryptos. What happens, who regulates them? And I think that will evolve,” the minister said.
Former Member of Parliament Rajeev Gowda said: “I’m not so sure as of now that we need a new entity. We need new capabilities within the existing organizations.” He added that regulatory bodies, like the securities commission (SEBI) and the Enforcement Directorate, along with the government, and the central bank (RBI) should be able to fulfill multiple roles.
India missing out on benefits
As the government defends its slow approach to regulating a “complex” sector, MP Priyanka Chaturvedi recently claimed that India is missing on the economic benefits of crypto due to the government’s overly cautious approach.
But with more clarity and a framework in the coming months, 5ire’s Pratik Gauri predicts that crypto and blockchain will adapt to an emerging situation.
Gauri said: “With every investment opportunity comes risk, and the market simply prices that risk in. In this event, I think the crypto market in India will price the additional regulations into the equation.”