Unwise for India to place bans on private crypto assets: Report

crypto, crypto assets, India, cryptocurrency, Observer Research Foundation

A new monograph by the Observer Research Foundation, in collaboration with the Esya Centre, presents a deep-dive into the growth of cryptocurrency in India and proposes a balanced regulatory approach.

According to the study, it would be unwise for India to place bans on private crypto assets, when it has the ability to capitalise on the opportunity offered by cryptocurrency.

The report offers key policy suggestions on building the ideal crypto regulatory framework that would both benefit India’s economy and ensure consumer welfare.

The Indian crypto asset industry has witnessed exponential growth over the last five years. Analysts suggest that more than 15 million Indians now hold digital currencies. As a result, cryptocurrencies, like any other financial asset, need to be regulated in order to ensure consumer welfare as well as promote innovation. This is the key finding of Regulating Crypto Assets in India, a report that has been jointly published by the Observer Research Foundation and Esya Centre, two New Delhi-based public policy think tanks.

The report is a first-of-its-kind deep-dive into the world of cryptocurrency in India one of the fastest growing consumer-bases globally. This analysis comes at a time when New Delhi aims to introduce a bill to regulate the asset.

The report argues that India is well placed to capitalise on the opportunity that crypto assets present due to its expanding private crypto market. Hence, it would be imprudent to place a blanket ban on private crypto assets. This would result in significant revenue loss to the government and may encourage nascent industries to operate illegally.

Instead, the report suggests a balanced regulatory approach, which addresses the concerns of fiscal stability, money laundering, investor protection and regulatory certainty while fostering innovation.

“Most regulatory formulae necessary to address the policy concerns related to crypto-assets, such as investor protection, foreign exchange management, money-laundering and tax evasion, already exist in financial legislation,” says Meghna Bal. “They just have to be adapted to accommodate an emerging technological paradigm. The recommendations in our report show how this can be done.”

In India, classifying crypto as a security, good, or capital asset could lead to unintended restrictions on investment or leave regulatory gaps in key policy areas. A sui generis crypto framework that adopts the nuances of the crypto industry would be more appropriate and in keeping with emerging global trends.

The report also lays out suggestions for lawmakers on what a crypto regulatory framework must include: it must be technology neutral, innovation friendly and consistent, to fully harness India’s potential in this domain. Among other things, the framework must lay down clear definitions, identify the relevant regulatory bodies and create KYC/anti-money laundering obligations, the report says.

The regulatory framework should also protect crypto asset service providers from being liable for the actions of investors on their platform. This will help asset service providers innovate and scale new crypto-based products and offerings.

The report proposes that the government adopt a co-regulatory approach where industry associations and authorities such as SEBI, the RBI, and the Ministry of Finance share the responsibility of oversight. Such an approach follows the Japanese model, where authorities have tasked industry associations to enforce regulations. Providing incentives to industry whistle-blowers could help players within the crypto-market self-regulate.

What India needs is a facilitative regulatory framework that would boost the growth of India’s crypto ecosystem while addressing any possible harms to consumers and society at large.

News Related

OTHER NEWS

Facebook declined to spin off Workplace app as $1-billion unicorn

Facebook (before it was rebrandeded as Meta) was approached by venture capitalists to spin off its Workplace app and make it a new company valued at over $1 billion. But ... Read more »

JM Financial Asset Reconstruction Company allowed to substitute Bank of India as petitioner

A dedicated bankruptcy court has allowed JM Financial Asset Reconstruction Company (ARC) to substitute the original petitioner Bank of India in a plea seeking admission of National Steel & Agro ... Read more »

Coronavirus Omicron India LIVE: Uttarakhand extends COVID curbs till January 31

Coronavirus Omicron India LIVE: According to the Union Health Ministry data updated on Sunday, the country had logged 3,33,533 new coronavirus infections, taking the total tally of COVID-19 cases to 3,92,37,264. The  active ... Read more »

Indians placed record bets on US stocks in 2021

(This story originally appeared in on Jan 24, 2022) Chennai: Year 2021 could well be when Indian retail investors truly came of age as they ventured into Wall Street in ... Read more »

Why 2021 seems like 2000 for stock markets

(This story originally appeared in on Jan 24, 2022) Every reasonable investormust have, at least oncein a lifetime, their own‘Lucky Fool Moment’. Mine came in February2000. Having luckily invested asmall ... Read more »

ICICI director, who quit last week, fined for insider trade

(This story originally appeared in on Jan 24, 2022) Mumbai: ICICI Bank has informed the stock exchanges that independent director Rama Bijapurkar, who said on Friday that she was stepping ... Read more »

Over 21,900 families who lost member to COVID-19 given Rs 50,000 ex-gratia: Delhi govt

Representative image A total of 21,914 families who have lost their loved ones to COVID-19 in Delhi have received a one-time ex-gratia of Rs 50,000 from the Delhi Disaster Response ... Read more »

Sebi lens on Rama Bijapurkar's trades in ICICI Bank

Mumbai: The Securities and Exchange Board of India (Sebi) is probing into the trades of ICICI Bank ‘s former independent director Rama Bijapurkar to see if she violated insider trading ... Read more »

PM Modi unveils hologram of Netaji Subhas Bose

Unveiling the hologram of Netaji Subhas Chandra Bose here on Sunday on the occasion of his 125th birth anniversary, Prime Minister Narendra Modi said that though the penance of lakhs ... Read more »

Bring back MDR, appeals payments industry

The digital payment sector is seeking reintroduction of MDR (merchant discount rate) charges in the union budget as the absence of it is crippling the homegrown payment service providers while ... Read more »

Netaji statue installed due to pressure from Bengal government: Mamata Banerjee

West Bengal chief minister Mamata Banerjee on Sunday said the Centre was installing Netaji Subhas Chandra Bose’s statue at India Gate due to pressure from her government. She was taking ... Read more »

Brokerages retain bullish views on ICICI after strong Q3 show

Mumbai: Brokerages have maintained a bullish view on ICICI Bank and raised target prices after the lender reported a 25% year-on-year rise in standalone net profit at ₹6,194 crore for ... Read more »

Goldman sees risk Fed will tighten at every meet from March

Goldman Sachs Group Inc. economists said they see a risk the Federal Reserve will tighten monetary policy more aggressively this year than the Wall Street bank now anticipates. The Goldman ... Read more »

FPI-heavy stocks, newly-listed companies may have some more pain in store

Mumbai: If foreign portfolio investors (FPI) that have sold shares worth more than ₹9,400 crore so far this month continue their selling spree this week, the biggest casualty would be ... Read more »

Companies should hedge at least 63% of ECB exposure: RBI paper

Indian corporates which have borrowed in US dollars are exposed to currency volatility as they may be ‘inadequately’ hedged to protect them from sudden swings in the direction of currency ... Read more »

US stocks deliver strong gains in Fed hike cycles

As the Nasdaq 100 comes off its worst week since the pandemic selloff in March 2020, investors now have to contend with Wednesday’s Fed meeting, where officials are expected to ... Read more »

Nifty could test 17,300 if 17,500 support is breached

Technical analysts expect the Nifty to fall further in the week before the FY23 Union Budget on February 1. Analysts said the Nifty could fall to 17,300 if it breaks ... Read more »

Fed action seen imminent, Street on edge

Mumbai: The stock market is on the edge after posting the largest weekly decline in eight weeks ahead of the US Federal Reserve‘s rate setting meeting on Wednesday. In the ... Read more »

Punjab's Doaba, Manipur's Hills battle vax hesitancy

The fertile Doaba region in Punjab and the hill districts of Manipur have emerged as areas of concern with very poor vaccination coverage and hesitancy ahead of elections in February ... Read more »

Assam, Meghalaya ready to swap land

The state governments of Assam and Meghalaya have come up with an accommodative, give-and-take formula involving swapping of land to solve decades-old border disputes between the two neighbours. A senior ... Read more »

PF & ESI: Karnataka working on law to keep hawk's eye on compliances by manpower firms

The Karnataka government is working on a law to get manpower providers to honour promised wages to their workers and comply with other statutory requirements including provident fund (PF) and ... Read more »

Shiv Sena could have its own PM if the party had an all-India presence: Uddhav Thackeray

Chief Minister Uddhav Thackeray on Sunday said that the Shiv Sena could have its own Prime Minister ruling the country if the party had contested the polls in other states ... Read more »

Congress does not want an unified North East: Himanta Biswa Sarma

Guwahati: Assam Chief Minister Himanta Biswa Sarma on Sunday accused the Congress party of weakening the North East adding that Congress’ game plan was to keep the North East fighting ... Read more »

Missing youth from Arunachal Pradesh found in China, confirms PLA

People’s Liberation Army (PLA) of China has confirmed that it has found a missing Indian boy from Arunachal Pradesh in their territory. Army sources said that due procedure is followed. ... Read more »

Eastern Nagaland People's Organization (ENPO) abstains from Republic Day celebration

Eastern Nagaland People’s Organization (ENPO) has decided to abstain from Republic Day celebration. ENPO in statement stated, “it is to remind all concerned that the ENPO in its joint consultative ... Read more »

COVID-19: Omicron driven wave will turn to villages after metros, says expert

The Omicron variant driven wave of COVID-19 will now turn to small towns and villages in the coming few weeks after its transmission in metro cities as each time a ... Read more »

Assam government to confer 'Asom Baibhav Award' to Ratan Tata

With Assam government deciding to confer the ‘Asom Baibhav Award’, state’s highest civilian award, to industrialist Ratan Tata, the industrialist has expressed his inability to personally visit Assam on Monday ... Read more »

BJP decides to serve showcause notice on two dissidents

In a further clash with the dissent leaders in the party, West Bengal Bharatiya Janata Party (BJP) leadership issued showcause notices on Sunday to two senior party leaders, Joy Prakash ... Read more »

Mumbai sees 2,550 new COVID-19 cases, 13 fatalities

Mumbai on Sunday reported 2,550 new coronavirus positive cases, taking the tally of infections to 10,34,833. The death toll rose to 16,535 after 13 more patients succumbed to the coronavirus ... Read more »

Drowning in losses, Delhi traders slam weekend curfew, odd-even rule

Weekend curfew and odd-even rule have hit the businessmen hard in the city with many of them struggling to meet break-even. Some of the traders PTI spoke to contemplated mortgaging ... Read more »

UAE bans private drones after deadly attack on Abu Dhabi

The UAE government has ordered to stop all flying operations of private drones and light sports aircraft in the Gulf country for a month, days after two Indians and a ... Read more »

PM Modi unveils Netaji Subhas Chandra Bose's hologram statue at India Gate

Netaji Subhas Chandra Bose’s Hologram Statue at India Gate. (Image: ANI) Prime Minister Narendra Modi on Sunday unveiled a hologram statue of Netaji Subhas Chandra Bose at India Gate on ... Read more »

From 'moonwalk' to dressing up as 'Yamraj', traffic cops get creative to spread road safety awareness

From doing the ‘moonwalk’ while managing traffic to dressing up as ‘Yamraj’ for sensitising commuters against drinking and driving, traffic cops from across the country are using creative methods to ... Read more »

Republic Day Parade 2022: Army troops to don uniforms from different eras

File image: Indian soldiers march during the full dress rehearsal for the Republic Day parade in New Delhi, India on January 23, 2021. (Image: Reuters/Adnan Abidi) In the upcoming Republic ... Read more »

ULFA (I) refrains from calling bandh on R-Day, Himanta says such gestures may lead to talks

Assam CM Himanta Biswa Sarma (File image) In view of the prevailing COVID-19 situation, Paresh Barua-led ULFA (Independent) has refrained from calling bandh on Republic Day for the first time ... Read more »

Meghalaya reports 318 fresh COVID-19 cases, 1 new death

Meghalaya on Sunday recorded 318 new COVID-19 cases, 88 less than the previous day’s count, pushing the tally to 88,459, a senior health department official said. Health Services Director Dr ... Read more »

COVID-19: Vice President Venkaiah Naidu tests positive, set to miss Republic Day celebrations

Venkaiah Naidu Vice President Venkaiah Naidu tested positive for COVID-19 on January 23 and will remain in self-isolation for the next week.  In a tweet by the Vice President Secretariat, Naidu asked ... Read more »

Digital payment sector wants MDR to be back

The digital payment sector is seeking reintroduction of MDR (merchant discount rate) charges in the union budget as the absence of it is crippling the homegrown payment service providers while ... Read more »

COVID-19: Complete thought given to school reopening decision, says Maha minister

Maharashtra Health Minister Rajesh Tope said the decision to reopen schools for primary classes to XII from Monday was taken after complete thought was given to the issue. Schools were ... Read more »

106 deaths in Delhi in January due to cold, claims NGO; Officials deny

At least 106 people, mostly homeless persons, have died in Delhi this month due to cold conditions, non-government organisation Centre for Holistic Development (CHD) has claimed and written to Chief ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic