India disagrees on regulation issue – crypto gazette – cvbj


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The regulation of cryptocurrencies is a serious issue, if it wasn’t, most countries already have regulations for this asset class. For a settlement to be made, it is important to take too many aspects and know what is being regulated in order to be able to cover it properly. The point is, for this to happen, it takes a long time, longer than the regulators envision.

So far, the Indian government has been considering making an amendment to the income tax law. This change will apply to the 2022-23 budget and its objective is to place digital currency investments and trading under the control of official authorities. Although the plan looks interesting, there is still some lack of clarity on this issue, so much so that it is not clear who will be in charge of regulating the sector.

The point is that at the moment everything is very vague. It is proposed that certain sections of the law be amended to include the term “cryptocurrencies” in the country’s regulations. With that alone, regulators would be allowed to have better control over the use of cryptocurrencies. In this way, they will be able to know who is investing, who is negotiating and if there is any illegal activity.

While it sounds very interesting and possible, there is nothing written down and it is not clear how cryptocurrencies will be introduced into law, let alone how they will be adapted. To determine this, officials say it’s critical to define cryptocurrencies, create a comprehensive regulatory plan, and how it will adapt, but it’s not yet known.

We don’t know how to define cryptocurrencies

Before we commented that it was a bit difficult to regulate cryptocurrencies and it is a reality that affects India. The difficulty arises from the difference between the nature of the laws related to the economy and the nature of cryptocurrencies. The traditional economy is quite different from the digital and decentralized economy and finding a place for it in law is a challenge.

So far, the possibility of the Reserve Bank of India regulating cryptocurrencies and treating them as a financial asset is under consideration. This would give cryptocurrencies the quality of currency to some extent. It also means that if it is defined as a business asset, capital gains taxes will be applied for the tax return.

It all sounds like very interesting and the best way to deal with cryptocurrencies, but it goes deeper than it looks. Some adjustments remain to be made to obtain good results. If regulations are applied that do not take into account all dimensions, this could increase the risks for investors.

India continues against cryptocurrencies

Even though India doesn’t know how to ban cryptocurrencies, it will ban them one way or another. The government recently made it clear that during the next session of parliament in which cryptocurrencies will be discussed, there are no plans to strengthen the cryptocurrency realm in the country. Thus the country assures that its objective is not to include crypto-currencies in the regulation to protect the investments, what they will do is to regulate the crypto-currencies to restrict their use, or to allow it for their profit. .

And in relation to the previous question, the country’s finance minister said that parliament does not have any data on digital assets precisely because they are not regulated in the country. The main problem is that cryptocurrencies are not known and the plan to regulate them may be quite insufficient.

While there is no knowledge of what the regulatory plan will be, the ban is a fact. At a recent government session, he was told that private cryptocurrencies from India would be banned, but with certain exceptions taking into account the promotion of cryptocurrency technology. It also introduced the development of Indian digital currency which is quite a topic.

Much like creating regulations for cryptocurrencies, developing central bank digital currencies is not a simple matter. For China, which is the country with a fairly advanced central bank money project, it took several years. So many that just a few months ago, the first closed tests began to be carried out and the project has not yet seen the light of day.

For a central bank cryptocurrency to be valid, many changes must be made. And one of the first is to change the statutes of the Law of the Reserve Bank of India which was created in 1934. It is quite closed in terms of currency and the introduction of a digital currency is practically impossible if it is not changed. . Just like the first step, the research, development and testing process is still missing and it could take up to 5 years or more.

Source: Finance Sina

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