Crypto Trading Platforms in India are becoming fast popular. There are many cryptocurrency exchange platforms such as YaCrypto operating in the country without any legal hassles.
In 2019, the Ministry of Corporate Affairs created a committee to make recommendations to include disclosures on cryptocurrency holdings.
Legal tenders are a medium of exchange to settle transactions. A currency is only considered a legal tender if people inside territories use it to settle debts. Almost all legal tenders have government backing. However, cryptocurrencies though can be used for transactions do not have any clear legal status. Despite this ambiguity, cryptocurrencies are becoming increasingly popular.
2 to 3 years back, the Reserve Bank of India (RBI) was against the use of cryptocurrency altogether. The RBI recommended the Indian government put a complete ban on all crypto transactions. However, after December 2021, the RBI has softened its stance on cryptocurrency. The bank is now interested in providing a basic model of a central bank-issued digital currency (CBDC). Furthermore, the bank clarifies that CBDC will provide a robust, safe, and more convenient substitute for physical cash. It may lead to better liquidity and scalability. RBI also claims that it will simplify the existing forms of money. The Indian Government has no regulatory framework till now. The tax deduction on cryptocurrency is 30% and a 1% tax will be deducted at source on crypto transactions.
Crypto Trading Platforms in India can only become legal if the government introduces a specific bill in parliament. Once the bill is the majority in the parliament passes, then it will become a law. However, in a democratic country like India, a crypto law may face further challenges from the judiciary. The actual text of the crypto law will determine whether crypto trading platforms and the entire cryptocurrency system will be legal or not. Currently, the bill may not ban private cryptocurrencies.
However, there can be some restrictions on its usage as an asset. Thus, there is a considerable amount of uncertainty about what India will do. However, it is also true that both the government and the RBI have softened their stance. In the recently held G20 meeting, the Indian Finance Minister Nirmala Sitharaman clearly stated that there is an international push to frame a clear policy and regulatory framework on crypto trading platforms and cryptocurrencies.
In March 2020, the Supreme Court of India overturned RBI’s prohibitions on cryptocurrencies. It also censured the RBI for violating the fundamental rights of citizens. It regarded that banning was a disproportionate response. This has opened a wider adoption of cryptocurrencies in India. This action may encourage cryptocurrency traders and investors to use cryptocurrency trading platforms.
India currently does not have a clear framework to regulate cryptocurrency trading platforms. However, there are some indications that it may have such frameworks soon. This is because the Indian government and the Supreme Court have not placed any legal restrictions on crypto trading. Moreover, the RBI has softened its stance too. In the future, there are high chances that India may simplify crypto trading. There are high hopes that it will covertly encourage crypto trading platforms like YaCrypto.
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