‘Backtracking Never A Good Policy,’ Experts Comment As India’s Finance Minister Hints At Banning Cryptos

‘Backtracking Never A Good Policy,’ Experts Comment As India’s Finance Minister Hints At Banning Cryptos

My additional comments:

Stating this upfront is a good strategy. I believe FM Sitaraman is giving a warning to all that if cryptocurrencies become too out of hand, there is a chance to revise the regulations. I do not see this as bad backtracking. If you looked at it from FM’s perspective, if crypto becomes very successfully and they felt that the market is receptive, open and ready for this new digital currency, there might also be other possible incentives that can be introduced. Reducing from 30% to 10% is not backtracking right?

In my opinion, the revision is reasonable and it is an act to protect the India market.  The digital rupee is not an easy task for India. India is a big economy and may need to exercise more control over its currency before adopting it to its fullest scale. Potential security issues can be a problem at the start and I urge experts to look deeper into the direct and indirect costs potentially linked to the implementation so as to allow them to drive innovation to the peak.

 

‘Backtracking Never A Good Policy,’ Experts Comment As India’s Finance Minister Hints At Banning Cryptos

KEY POINTS

  • India might ban cryptos even after taxation
  • India to tax cryptos at 30%
  • Industry seeks clarity on new announcements
  • ‘Backtracking never a good policy’ says expert

Conflicting signals from the Indian government on the legitimacy of cryptocurrency has not gone down well with the industry. International Business Times spoke to several experts to gauge the sunrise sector’s mood and all of them asked for just one thing – clear directions from the top.

The federal budget for the year beginning April seemed to chart out a path when it imposed a 30% tax on cryptocurrencies. A few days later, however, Finance Minister Nirmala Sitharaman said she could still ban the cryptos later. Industry insiders believe that backtracking is not a good policy especially for a big economy like India.

In a recent interview to The Economic Times, Sitharaman said, “Banning or not banning will come subsequently when the consultations give me inputs. But would you say till then I do not even tax the huge profits being transacted? I will. Legitimate or not legitimate is a different question, taxing is completely my prerogative.”

Raj Kapoor, founder of India Blockchain Alliance and Chief Growth Officer at Chainsense, said, “Backtracking is never a good policy and I feel the statement should be viewed as a statement where we have taken a baby step forward but the steps and strides seem miles away.” Kapoor believes that the announcements made in the federal budget about cryptos have a lot of grey areas that needs to be addressed.

“When we say ‘ban’ crypto currencies what exactly do we ban? What are the permissible exemptions? Do we permit crypto currencies to make in platform payments the largest exemption issue? What is the manner you permit purchase of exempted cryptocurrencies for exempted use by sovereign currencies? Questions galore, solutions in the grey,” he told International Business Times.

Shivam Thakral, chief executive officer of Indian exchange BuyUcoin, believes that the finance minister might be referring to a “worst-case scenario like when most (Financial Action Task Force) member-countries decide to ban crypto.”

“There’s also a burgeoning concern among global regulatory watchdogs that crypto can have an adverse impact on economic stability in countries like India. We’re really optimistic that the government of India will address these concerns and bring in a strong regulatory framework to tackle all these issues to become global leaders in crypto & blockchain industry,” Thakral told International Business Times.

On the other hand, Anndy Lian, chairman of BigONE Exchange, believes that stating upfront that the government might ban cryptos later is a “good strategy.”

“I believe FM Sitaraman is giving a warning to all that if cryptocurrencies become too out of hand, there is a chance to revise the regulations. In my opinion, the revision is reasonable and it is an act to protect the Indian market,” Lian told International Business Times.

India has decided to introduce a 30% tax on cryptos and plans to work on a digital rupee backed by blockchain beginning the financial year starting April.

“The quantum of taxation is something that is discouraging.  Also, specific sections regarding TDS are still confusing. This might act as a dampener for greater adoption,” Gupta told International Business Times.

“We must remember this is just the beginning of the larger process of adoption, multiple discussions are needed to come up with better systems or processes. But we are very hopeful that right actions will be taken,” he said.

 

 

Original Source: https://www.ibtimes.com/backtracking-never-good-policy-experts-comment-indias-finance-minister-hints-banning-3391556

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Banning cryptocurrencies not a solution, say experts

Banning cryptocurrencies not a solution, say experts

New Delhi: All eyes are on the much talked about Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 to be introduced in the winter session of Parliament beginning next week. In a meeting chaired by Prime Minister Narendra Modi on 13 November, he had flagged the issue of misleading non-transparent advertising on crypto currency. Stressing the point on how “unregulated” markets cannot be allowed to become avenues for “money laundering and terror financing”, a major concern and issue for the government was how youths of the country are misled and over promising and non-transparent advertisements attract youths. In the craze for more and easy money and a better future, youth are, in fact, being led to a bleak future. But the government is also aware that this is an evolving technology and thus steps taken by government will be progressive and forward-looking. The RBI continues to be a critic of crypto currencies, saying they pose serious threats to macroeconomic and financial stability of the country. While details of the said bill are not known, the 2021 bill seeks to prohibit all private crypto currencies in India with certain exceptions to promote the underlying technology of crypto currency and its uses. The bill also seeks to “create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India”.

While there is lot of noise around whether the Indian government will ban crypto currencies or not, global experts say ban is not the solution and more regulations on crypto transactions, legal framework and penalties on fraudulent activities will help.

The Sunday Guardian talked to some experts to know views on the same. Anndy Lian, an inter-governmental blockchain adviser and investor and chairman at BigONE Exchange, which is a global digital asset, says, “There is need for better regulation and education to support the estimated 15-20 million crypto investors in India, who are benefiting from using crypto currency to send and receive money around the world, through to earning money from playing blockchain-based games such as Axie Infinity. As a government, one cannot stop the move to decentralization. With India’s crypto adoption ranking second in the world in the recent 2021 Global Crypto Adoption Index, this move looks like it will not only hurt individuals, but also larger businesses. Compared to Vietnam and Pakistan, the country has a significantly larger share of large institutional investors, suggesting that India’s cryptocurrency investors are part of larger, more sophisticated organizations. To ban cryptocurrency as part of a wider strategy to roll out their own central bank digital currency (CBDC) will therefore seriously undermine the nation’s crypto and blockchain business community, with the crypto industry in India currently seeing over 100% growth month-on-month growth, despite the government’s alleged desire to foster innovation in the blockchain sector.”

New Delhi-based cyber law expert Virag Gupta said: “While crypto is spreading like wildfire, there should be no delay in its regulation. The delay in bringing a law has given an opportunity to certain exchanges to create a parallel empire of cryptocurrency. Crypto currency and Bitcoin scams have surfaced and regulation is much required.” He also said it’s a misconception to believe that a conducive regulatory environment will harm the crypto currency sector. Rather, to cement a certain future, detailed jurisprudence diving deep within the currency and technology is essential. “Taking the benefit of zero regulatory framework around crypto, the “self-styled godmen” of this industry have made their own regulatory mechanism and code of conduct which have put the Indian law-making machinery in a bad light for the world. The biggest question now is: How is the government planning to levy and recover tax on money being made by crypto trading exchanges and apps? If it is treated as capital gains, then the players get undue benefit and if it is treated as business income, then the whole illegal system turns legal,” Gupta said, adding: “In the proposed law, if cryptocurrencies are not accepted as legal tender, how will it be treated as an asset class and who will be its regulator. Non-levy of GST in various layers of its transaction and non-imposition of income tax with penalty is causing huge loss to the state and central government revenue.”

Hayden Hughes, CEO of Alpha Impact, a social trading platform, said like other central banks across the world, the RBI is “fearful” of losing control over monetary policy and seeks to rapidly push a Central Bank Digital Currency while slowing down mainstream crypto currencies. “The RBI has been battling the Supreme Court over the fate of crypto currencies in India since 2018, in a ban that was ultimately overturned. The thesis is that if CBDC adoption can occur, the threat will be mitigated. While it’s clear that there will be some restrictions, the latest draft of the bill has not been made public. There has been explicit references to “exceptions” in the bill, and the devil will be in the details. Even if there is a total ban of crypto currencies in India, we only have to look to China to see that firms would immediately offshore their operations. Only on-shore crypto companies would be affected. Bitcoin and cryptocurrencies are, after all, decentralized, meaning they cannot be shut down. If China cannot shut crypto down, India won’t be able to either.”

Aliasgar Merchant, Developer Relations Engineer at Tendermint, which is the core contributor of Cosmos SDK with flagship products such as Starport and Emeris, said: “A blanket ban on crypto currency will have a negative impact on the Indian economy. Apart from immediate effects like drop in value, institutions working on cutting technology like blockchain will lose trust and ultimately there will be a brain drain. While I recognize the potential misuses of crypto, the government should be focused on regulating crypto rather than putting a blanket ban on crypto. This brings us to the question will people stop investing in crypto? Decentralized exchanges like Emeris, Uniswap, etc could be used which will ultimately defy the purpose of a ban. This is very similar to banning alcohol in a state. People interested smuggle the spirit, ultimately costing the government millions in taxes.”

With crores of Indians invested in crypto currencies with their holdings totaling billions according to industry estimates, many are worried about the future. At the same time, many feel this is an opportunity in the hands of India as a country to show the path to others towards the crypto world and it will be interesting to see how India grabs this opportunity.

 

 

 

About Sunday Guardian

The Sunday Guardian is a Sunday newspaper founded by journalist, author and politician M.J. Akbar in 2010. The newspaper is divided into two sections: news and features, with 20 pages dedicated to each section. Both provide interesting perspectives which is a mix of news, investigation, opinion, entertainment, lifestyle and issues of human interest. M.D. Nalapat is the editorial director of the newspaper. The newspaper has two editions—Delhi and Mumbai.

The newspaper is owned by the ITV Network of Kartikeya Sharma, Managing Director ITV Network (Information TV Pvt Ltd), which also runs news channels India News and NewsX.

 

Also found on Epaper, page 17: https://www.sundayguardianlive.com/e-paper/28-november-2021/

 

Original Source: https://www.sundayguardianlive.com/news/banning-cryptocurrencies-not-solution-say-experts

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j