Bitcoin transactions have existed in India, among others, since the leading cryptocurrency was launched in 2009. However, as its use became more widespread, it met with cynicism and hostility from governing bodies such as the RBI, especially in 2018. The position could not be held for too long will.
Central banks around the world had issued their own cryptocurrencies – some of them declared them legal tender, and the rest of them acted on hold. Due to global trends in favor of cryptocurrencies, a commitment to protect human rights and based on proportionality, the Supreme Court lifted the March 2020 ban on trading crypto assets.
“If the RBI is consistently of the opinion that they have not banned virtual currencies and the Indian government cannot take a phone call despite several committees putting forward several proposals, including two bills both advocating exactly opposite positions, then it has done it it is not possible for us to claim that the measure in question is proportionate, “the Supreme Court said.
But there are other reasons why the Indian authorities eventually had to give in to the rising popularity and public demand for Bitcoin and the cryptocurrency industry. Virtual currencies have enabled millions of Indians to participate in the global ecosystem of cryptocurrencies. They made transactions easier, faster and cheaper for Indians around the world, and enabled Indians to make informed decisions about investing in one of the world’s best performing assets. As many industries collapsed in 2020, the crypto industry created thousands of jobs and helped employees keep their jobs and improve their skills.
There’s a lot of hype around Bitcoin when prices are bullish. However, it is important to remember that Bitcoin gets its value from its ability to enable fast and free transactions. Just as email communication made the transfer of information fast and free, technology like Bitcoin has the potential to revolutionize money.
Up until now this has been viewed as a fairly speculative instrument, but this is still a phase it had to go through in order to discover its own worth, so that it can be used in future generations for the “value transfer” mechanism. Furthermore, we must remember that most developed countries have stable currencies and the general public generally lives off credit. In India, however, the local fiat currency is depreciating faster and our people have a strong savings instinct. This, together with the rise of digitization and the technical know-how of the younger generation, makes Bitcoin technology very useful to us.
The cryptocurrency industry is therefore here to stay and it is important to facilitate its progress, especially given the economic downturn caused by the pandemic. The RBI, together with SEBI and the Government of India, should consider exercising its regulatory powers and develop a new, calibrated framework or regulation that recognizes the reality of these technological advances. We must seize this opportunity to keep India on the forefront with other leading global economies and to ensure continuity of business for investors and stakeholders.
Here are some things the Union budget should consider in order to bring more regulatory clarity to cryptocurrencies in India:
1. Regulate the flow of money.
2. Opportunities to raise capital.
3. Provisions and amendments to IT and GST laws to clarify the applicability of taxes. 4. Recognition of certain acts as a criminal offense so that users and platforms can better understand their rights and obligations.
5. Recognition of cryptocurrencies as tradable goods.
6. Use blockchain technology for government documents.
While it may not be possible to get all of these rules out at once, some kind of road map would be necessary. This would help the country on several levels, be it in terms of investment opportunities, employment or innovation. If such legislation is announced, India will join the ranks of countries to create a solid legal framework for crypto assets and be able to compete with developed countries in the industry.