The uncertainty about the future of cryptocurrencies in India continues to haunt firms in the red-hot market place of virtual currencies. Even as Finance Minister Nirmala Sitharaman clarified at an occasion lately that the government will not totally shut cryptocurrencies in India, the nation could go ahead with a sweeping ban on bitcoin and other various digital currencies. The government was anticipated to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the ongoing Parliament session to ban all ‘private’ cryptocurrencies amid issues more than their use for terror financing, revenue laundering, and other illegal activities. Startups and other firms in cryptocurrencies, nevertheless, have been urging the government to stay clear of an outright ban that will hurt investments from millions of individuals in India.
Crypto exchanges had welcomed Nirmala Sitharaman’s statement at the lately held India Today Conclave that “while the RBI may take a call on official cryptocurrency but from our side, we are very clear that we are not shutting off all options.” However, a Reuters report on Monday, citing a senior government official, stated that India will propose a law to ban cryptocurrencies and fine everyone trading in the nation or even holding such digital assets. Startups have reiterated their crucial ask for regulating the market place as an alternative of coming with a law to ban it.
“KYC is practically the first step towards keeping track of transactions and proceed to the norms of AML/CFT (Combating financing of terrorism). It enables traceability of assets and hence prevents issuing for some illegal activities. We should take a cue from Japan and create a central body of cryptocurrency exchanges which would directly report to Securities and Exchange Board of India (SEBI) for following strict regulatory guidelines issued by RBI,” Shivam Thakral, CEO, BuyUcoin told TheSpuzz Online.
A report in February 2021 by the US-based blockchain evaluation business Chainalysis, which delivers information and evaluation to government agencies, exchanges, and economic institutions to engage with cryptocurrencies, noted that a Kashmiri couple Jahanzaib Sami and Hina Bashir Beigh had been arrested in March 2020 for soliciting cryptocurrency donations to a bitcoin address. They had received the address from a Syria-based ISIS operative to supply weapons and explosives as they had been allegedly preparing attacks in India. In a different instance, back in 2018, Pune Police had arrested a particular person named Amit Bhardwaj, touted as a bitcoin entrepreneur, for defrauding a whopping quantity of Rs 2,000 crore of as numerous as 8,000 individuals, according to an Indian Express report. In the very same year, according to a PTI report, Gujarat CID had arrested BitConnect promoter Divyesh Darji for allegedly duping investors of crores of rupees.
“Regulation is needed in this sector to help protect consumers. We’d like to see India regulate so that all companies have to implement KYC and AML processes to protect consumers. There is nothing about cryptocurrencies that make them more appealing to ‘bad actors’ than fiat currencies. In addition, it would be great to see India develop measures to promote innovation in the sector for example with incubators and start-up fund,” Dev Sharma, Country Lead for India at the US-based crypto trading platform Paxful.
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Bitcoin had dropped to $53,834 on Tuesday morning from the $61,000 mark in the wee hours of Sunday. The cryptocurrency was trading at $55,657 at the time of filing this report as per the information from CoinMarketCap. The Reuters report, quoting John Wu, president of AVA Labs, stated, “Renewed interest from the Indian government in banning cryptocurrencies led to the initial drop from the $60,000 range down to $56,000.” AVA Labs is an open-supply platform for building economic applications applying blockchain technologies-based in the US.
Arjun Vijay who is the co-founder and COO of Chennai-based crypto exchange Giottus stated that government wants to come up with clear guidelines about buyer verification, anti-revenue laundering policies, transaction monitoring, taxation guidelines, and limits on transaction size. “Cryptocurrency regulations is a moving target. With rapid evolution, the government cannot be expected to come with perfect regulations in the first attempt. Need a body like Sebi or GST committee to continuously adapt to the changing scenarios.”
The final surge in bitcoin value to more than $61,000 was on the back of the $1.9 trillion Covid relief package announced by the US government. Bitcoin value had jumped final year as nicely when the US Congress passed the $484 billion Covid relief package in April. It coincided with the raise in bitcoin value from more than $6,900 to practically $9,000, displaying the impact of the bill on investors’ appetite for dangers involved in cryptocurrencies. Similarly, the $900 billion second stimulus announced in December witnessed an raise from more than $23,000 to practically $29,000 on December 31, 2020. According to sector estimates, there are more than 7 million crypt investors in India with more than $1 billion in investments.