7.3.18

Indian Govt plan to regulate of trading crypto currencies


Indian government is focused on deciding clear regulations for trading of cryptocurrencies and a policy framework is expected once the current committee submits its report, Ajeet Khurana, head, Blockchain and Cryptocurrency Committee (BACC) of Internet and Mobile Association of India (IAMAI).

While India does not yet have clear regulations on cryptocurrencies and exchanges, the govt has maintained that virtual currencies are not held as legal payment instruments in the country, but the Finance Minister did not say that cryptocurrencies were illegal. Cryptocurrency exchanges would argue that neither are gold, stocks, and bonds considered as legal tender. Still, Finance Minister Arun Jaitley’s statement in his Union Budget 2018 speech on Thursday were widely interpreted as a ban on the trading of cryptocurrencies.

“It is very wise that the government plans to not take any knee-jerk action on the exchanges. We are very happy with the measured, graduated and wise steps the government is taking,” Khurana, who took on the BACC role last month, said.

In the past, it has been argued that cryptocurrencies should be considered as an asset or commodity and be regulated by the Securities and Exchange Board of India (SEBI), rather than being considered a currency per se.

Khurana estimates the number of people in India who either presently use a cryptocurrency or have in the past held a cryptocurrency is about 5 million. “And this number is growing... Our exchange participants neither allow foreigners to participate nor allow foreign exchange to come in. We are working independently from the world. Despite that, our market mechanism is very vibrant. If you were to ever look at the order book of cryptocurrency exchanges and compare them to forex or stock exchanges, you would feel they are operating similarly,” he said.

Cryptocurrencies work on the blockchain technology, which uses a decentralized network. Blockchain technology uses a digital ledger to securely keep a record of each transaction between users within its system. Regulatory framework on cryptocurrencies in India is taking time because of the nature of the technological innovation and confusion over who should regulate it, Khurana said.

A series of developments globally have spoilt the party for cryptocurrency investors.

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