Countries like the US, China, Japan, Switzerland, South Korea and South Africa have embraced cryptocurrency, although uncertainty looms in India. After facing a ban on cryptocurrency transactions after, crypto investors and other stakeholders are skeptical about their future as the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is scheduled to be presented in the present Budget session of Parliament.
With Bitcoin crossing the $50,000 level soon after sustained demand from institutions like Tesla, MasterCard, Paypal, Microstrategy and so on, cryptocurrency players are hopeful that the government will not place a blanket ban.
Referring to acceptance of Bitcoin and other crypto currencies like Ethereum, Doge and so on, Nischal Shetty, CEO, WazirX, stated, “Institutional participation is also very low in India in crypto and regulatory uncertainty is the biggest hurdle in that. Institutional players would need regulatory clarity before participating in a new asset class like crypto. Introduction of a regulatory framework will certainly help cryptocurrencies thrive in India.”
Earlier, the Reserve Bank of India (RBI) had banned the cryptocurrencies in India as there is no regulation. Although the Indian Rupee (INR) can only be utilised as a currency in India, cryptocurrencies are utilised more like digital assets.
Unlike other currencies, cryptocurrencies may perhaps also be traded, resulting in large fluctuations in their values.
Cryptocurrency Dilemma: How to show crypto earnings in ITR?
As a outcome, there is no stability in the worth of cryptocurrencies, although stability is one of the parameters that determines the good quality of a currency.
However, in a cryptocurrency blockchain, only the respective cryptocurrency – like Bitcoin, Ethereum and so on – may perhaps be utilised and not the other regular currencies.
To avail the added benefits of cryptocurrencies, what is necessary is a regulation framework to safeguard the interests of crypto investors.
“A right crypto regulation will push India ahead, while a ban on Crypto will set our country back by a decade,” Shetty stated.
However, it is up to the government to choose whether or not to place a regulatory framework in location or place an outright ban on cryptocurrencies.