Crypto Bill can Take India to the Forefront of Blockchain Tech’

India’s messaging on cryptocurrencies has so far been mixed however the proposed bill that is likely to be introduced in the winter session of parliament allows New Delhi to bring in a progressive regulatory framework that could propel the country to the forefront of blockchain, as stated by the leaders of global crypto exchanges.

Representations have been made to a panel of federal lawmakers by the stakeholders, including regulators that the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 are likely to become a law soon.

As stated by Adam Mazzaferro, Founder of @pay, an Australian decentralized platform operating on the @pay token, “The journey of discovery that India is traveling in terms of regulating cryptocurrencies is one that most governments have to address and implement according to what is right for them at the time.” He also stated, “We believe that it is also important to consider how technology may benefit the general economy and the processes that drive many functions along the way. Over time, we take the view that these benefits and efficiencies will come through.”

Due to multiple messaging by different stakeholders, there has been major confusion over crypto in India: the central bank has red-flagged risks from cryptocurrency to the financial system while North Block is seeking to ‘regulate’ the asset class in its new crypto bill in place of enforcing an absolute ban.

Clarity and a clear direction in regulations are being sought by the global Defi community at large.

Mr. Toby Gilbert, CEO and Cofounder of Coinweb, operating out of London, Kyiv, and Bangkok said, “India’s politicians have consistently sent out mixed messages, threatening to ban cryptocurrencies several times, over fears of enabling the black money markets or (triggering) capital fight. Now is the time to encourage innovation in one of the most innovative countries in the world and to attract high-quality projects in the space to advance the technology as opposed to driving them underground or abroad to territories as close as Dubai.”

Blockchain and the crypto industry are by and large an interplay between technology and mathematics, two fields that Indians have been very good at conventionally, and hence it’s natural for Indians to get attracted toward it, as stated by Mr. Harishkarthik Gunalan, CEO of Singapore- based Coinfantasy.

He also said, “This attractiveness has manifested itself in such a large number of people from India trading digital assets and also in the fact that, without any regulatory support, India has had two crypto-focused unicorns in the last 8 months. A supportive regulatory framework will only enable many more who are watching from the sidelines as this once-in-a-generation new asset class emerges.”

As believed by the global industry experts, while framing laws around crypto assets, Indian regulators should keep in mind that cryptocurrencies are an integral part of the entire blockchain ecosystem.

Mr. Toby Gilbert also stated, “India is one of the fastest-growing economies in the world and is an important frontier for decentralized blockchain technology to penetrate. In turn, cryptocurrencies are an essential component, without which it becomes difficult to incentivize the decentralized component of the technology, and what you are left with is a centralized ledger, defeating the purpose of the object and severely limiting funding for innovation.”

Completely banning cryptocurrencies is just not possible in the rapidly evolving Defi ecosystem, as believed by experts such as Dr. Julian Hosp, CEO and Co-Founder of Singapore- based Cake Defi.

Hosp said, “It is important to note that cryptocurrencies as a whole exist on the blockchain. There is no single entity controlling it; that is part of its decentralized nature. While the Indian government can implement a ban on trading crypto, the exchanges that facilitate those trades, or even the enablement of using cryptocurrencies as payment methods, a blanket ban on cryptocurrencies just isn’t possible.” It was also added that “On top of that, you have decentralized exchanges (DEX), such as that of DeFiChain’s DEX, which wouldn’t come under the purview of any government or singular entity as they are run by distributed communities of developers and enthusiasts.”

There is an eager waiting among the regulators across countries and the crypto industry across the world for the bill to lay down rules for digital coins, tokens, and virtual currencies even as most other governments too are struggling to formulate crypto regulations.

In the US, the chair of the House Committee on Financial Services, Maxine waters, recently had a meeting with several CEOs of major crypto firms and discussed, digital assets and the future of finance. Lawmakers postponed a 20% crypto tax until 2023, in South Korea, citing flaws in gathering tax information.

Cryptocurrencies and some related activities have been partially regulated, in Russia, but many important areas such as crypto mining, taxation, and use of digital coins for payments and crypto trading have been left out. This has led to regulatory confusion. Germany brought in a regulatory rule for crypto assets last year but still has to reform the related civil law rule. However, a licensing framework is in the works for crypto issuers and service providers. 

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