• The International Monetary Fund (IMF) and the United States have both shown support for India’s plan to coordinate global crypto regulation at the recent G20 meeting.
• U.S. Treasury Secretary Janet Yellen said it was “critical” to put in place a strong regulatory framework but did not suggest any outright bans while IMF Managing Director Kristalina Georgieva suggested a ban as an option.
• India’s central bank, Reserve Bank of India (RBI), has long maintained a harsh stance toward digital assets, citing volatility as well as risks of fraud and scams even though the Indian government has debated drafting a law to regulate cryptocurrencies.
India’s Plan for Global Crypto Regulation at G20
The International Monetary Fund (IMF) and the United States have both shown support for India’s plan to coordinate global crypto regulation at the recent G20 meeting. U.S. Treasury Secretary Janet Yellen said it was “critical” to put in place a strong regulatory framework but did not suggest any outright bans while IMF Managing Director Kristalina Georgieva suggested a ban as an option.
RBI’s Harsh Stance Towards Digital Assets
India’s central bank, Reserve Bank of India (RBI), has long maintained a harsh stance toward digital assets, citing volatility as well as risks of fraud and scams even though the Indian government has debated drafting a law to regulate cryptocurrencies. RBI Governor Shaktikanta Das said cryptocurrencies don’t have any intrinsic value and their perceived “value is nothing but make-believe.” He also said cryptos are not even worth a tulip, alluding to the well-known Dutch tulip mania blow-up in the early part of the past century.
Indian Government Debates Crypto Regulations
Despite calls by RBI to ban cryptocurrencies, the Indian government has debated drafting a law to regulate cryptocurrencies. In July last year, India’s government noted that any effective regulation or ban on cryptocurrencies would require global collaboration among countries involved with regulating cryptos due to its borderless nature.
Tax Laws Adversely Impacting Crypto Trading Activity
India’s controversial crypto tax plans have adversely impacted trading activity within its borders due to their complexity and high taxes imposed upon income from cryptocurrency transactions including 30% income tax rate plus 1% tax deduction at source (TDS). These taxes are significantly higher than those imposed on other asset classes such as real estate which face much lower taxation rates in comparison with cryptos despite being more volatile investments than most traditional asset classes such as stocks or bonds..
Conclusion
It appears that although some members of different governments seem keen on introducing regulations for virtual currencies, there is still no united stand on how exactly these regulations should be implemented across different nations who use them . Furthermore, historically high tax rates imposed upon crypto transactions may continue to impede trading activities and potentially discourage investors from entering this market unless they are amended in some way or form in order for them not be so punitive towards traders participating in this new asset class