A finalised Government consultation paper gives the cryptocurrency community a sense of hope

    A consultation document on cryptocurrency will be released by the government soon. However, establishing the legal and regulatory framework may take longer.

    The government is getting information from numerous stakeholders, including the World Bank and the International Monetary Fund, according to Economic Affairs Secretary Ajay Seth (IMF).

    The government’s consultation paper is almost finished, according to a government official, and the administration has dug deep into it. Seth remained tight-lipped on the timeframe, although insiders say it may be tabled as early as August this year.

    The crypto sector and participants applauded the central official’s report and are hoping for some good news from the government. Many people believe that the government will take action to protect the environment.

    “We hope that the paper represents a need for global cooperation between countries to formulate regulations on crypto and encompasses various tenets of the Web3 ecosystem, which includes centralised exchanges and pure-play web3 product companies,” said Aritra Sarkhel, Director, Public Policy at WazirX.

    However, the influence on India’s impending regulation has still to be determined, he noted.

    “The entire ecosystem is quickly developing, and a multi-nation agreement is required for the ecosystem to thrive while keeping individual country interests in mind.”

    However, India’s economic affairs secretary stated that a legislation on cryptocurrency may take longer than expected because the country is awaiting an international framework on the subject.

    During the Parliament’s Winter Session in December 2021, the government planned to introduce a bill to regulate private cryptocurrencies. It was not, however, implemented at the time. India’s consultation paper on cryptocurrency should address both unilateral and multinational regulatory frameworks. On the state front, the industry is quite optimistic.

    This, according to Avinash Shekhar, CEO of ZebPay, will pave the way for investor safety, industry-wide best practises and enforcement, the prevention of illegal cryptocurrency use, and the promotion of sectors innovation and growth.

    “We anticipate the government taking a cautious, progressive attitude that considers the best interests of all actors in the category, both individually and institutionally,” Shekhar added.

    Despite the high ambitions of the local crypto business, the government’s position has been unsupportive thus far, as seen by the latest moves made.

    Finance Minister Nirmala Sitharaman declared a 30% tax on gains emerging from crypto assets in the 2022-23 Budget, as well as a 1% tax at source on all crypto transactions.

    However, the Centre underlined that taxes does not imply that cryptos are lawful. Since then, the government has asked for a global taxation framework for virtual digital assets.The Reserve Bank of India (RBI) has been an outspoken opponent of private cryptocurrency assets. In the next consultation document, which will give additional clarity on India’s official stance, the central bank is anticipated to have a significant voice.

    The focus on delivering a global framework to the crypto business rather than having an individual viewpoint, according to Vijay Pravin Maharajan, CEO and Founder of bitsCrunch, surely helps to interact with a larger spectrum of digital assets.

    “We can anticipate a consensus judgement in favour of cryptocurrency fans and investors. Across all digital assets that can contribute to economic growth, the sector can expect a favourable indication “He went on to say.

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