Nirmala Sitharaman, the finance minister, informed the house on Monday that the Reserve Bank of India (RBI) supports a ban on the cryptocurrency industry. The RBI is concerned that the inclusion of cryptocurrencies in India’s current financial systems may have a destabilising effect on the monetary and fiscal stability of the country, according to Sitharaman, who is calling for international support on crypto rules. The adjustment occurs at a time when India’s virtual digital asset tax rules went into effect, drastically reducing transaction volumes on Indian exchanges.
Sitharaman contends that if other nations do not agree with and carry out a similar decision, a ban on the cryptocurrency industry is not practical.
“The RBI believes that it should be illegal to use cryptocurrency. The RBI has voiced its concern regarding cryptocurrencies’ negative impact on the Indian economy. Because every modern currency must be issued by the central bank or the government, RBI noted that cryptocurrencies are not a form of money, Sitharaman claimed in a written statement presented to the Lok Sabha.
The Blockchain and Crypto Assets Council, a four-year-old crypto advocacy organisation, has opted to dissolve itself, according to a decision made earlier this month by the Internet and Mobile Association of India (IAMAI) (BACC). The IAMAI decided to focus its time and resources on other growing tech sectors after four years of supporting the council since they will contribute more immediately to India’s digital transformation currently awaiting legislation governing the cryptocurrency industry.
In her response to the lower house, Sitharaman stated that because cryptocurrencies are by nature global in scope, international cooperation is necessary to prevent regulatory arbitrage.
In her statement, Sitharaman also stated that “any legislation for regulation or for banning may therefore be effective only after major international collaboration on examination of the risks and benefits and evolution of common taxonomy and standards.”
Sitharaman is currently in charge of crafting the cryptocurrency legislation for India, which the parliament may address during the monsoon or winter sessions.
India can also gain a global perspective by studying the crypto legislation being developed by other countries in the meantime.
The US and the UK recently provided outlets for their citizens to voice their opinions and make ideas about the kind of crypto legislation that will foster the development of the budding industry without upsetting the status quo of the financial systems.
The Indian government has not yet introduced any such legislation.
The Organisation for Economic Co-operation and Development (OECD) published regulations in March directing international tax organisations on how to exchange information on cryptocurrencies. This legal framework’s objective is to integrate cryptocurrencies with global tax reporting networks.
The worldwide policy-making organisation has released a formal paper, the Crypto-Asset Reporting Framework (CARF), explaining its suggestions.
In reality, the Financial Stability Board, which was established last month by representatives of governments, treasuries, and central banks from 20 different nations, including India, promised to release international regulations for cryptocurrencies by October.
As the use of cryptocurrencies grows, so are the restrictions that have been put in place to control them globally. It might be challenging to stay up to date with the laws in many international jurisdictions because the crypto landscape is continuously changing.
We’ve put up this guide to assist you in navigating the wide range of Bitcoin rules, legislative attitudes, and actions around the world. Find out how various countries regulate coins and exchanges and whether they have any pending legislation that might influence how they view cryptocurrency.
Regulations for cryptocurrencies around the world
The US is making headway in creating federal cryptocurrency legislation, despite the fact that it is challenging to find a consistent legal approach at the state level. On the grounds that cryptocurrency tokens are “other value that substitutes for cash,” the Financial Crimes Enforcement Network (FinCEN), which does not consider cryptocurrencies to be legal tender, considers cryptocurrency exchanges to be money transmitters. The Internal Revenue Service (IRS) has published tax guidance defining bitcoin as “a digital representation of value that operates as a medium of exchange, a unit of account, and/or a store of value” despite the fact that it is not regarded as legal cash by the IRS.