The crypto industry is willing to work with the government towards addressing its concerns even as the taxation of cryptocurrencies continues to pinch investors amid global selloffs.
Finance minister Nirmala Sitharaman in a written reply to the Lok Sabha on Tuesday pointed out that any legislation to regulate or ban cryptocurrencies can be effective only after “significant international collaboration” to prevent regulatory arbitrage.
The note says the RBI is of the view that cryptocurrencies should be prohibited. The government’s move shows it is in no hurry to ban cryptos — especially when it has already imposed a 30 per cent tax plus surcharge and cess on the transfer of any virtual digital assets.
“Crypto is a borderless asset. Global rules would encourage mass adoption and strengthen trust in this asset class. Exchanges would be happy to work with the government to address industry-wide challenges together,” said Sumit Gupta, co-founder and CEO, CoinDCX.
“A 30 per cent fixed income tax is causing unfair tax burden to more than 95 per cent of crypto investors either at monetary level or at compliance level,” said Sathvik Vishwanath, co-founder and CEO, Unocoin. “If the main intention of TDS is to collect info about crypto trades, the same can be achieved by 0.01 per cent TDS as well. It need not be as high as 1 per cent that is shattering the industry,” said Vishwanath.
Legal eagles have started dissing the idea of a ban on crypto trades. “Cryptocurrency is here to stay and regulation rather than prohibition is the way forward. While some of the RBI’s concerns are indeed valid (such as potential money-laundering/terror financing risks), a regulatory framework which allows law-abiding citizens to transact using cryptocurrency should be formulated, rather than an outright ban.”
“The decentralized nature of cryptocurrency is such that a ban cannot be effectively enforced, and will merely drive it underground.” “The RBI’s ‘shadow ban’ against cryptocurrency is a step backwards and a potential violation of judicial precedent,” said Probir Roy Chowdhury, partner JSA.
