NEW DELHI: The government does not appear to be in a hurry to decide on the way forward for cryptocurrency assets. A senior official said on Sunday that India will hold extensive consultation with other countries before coming to any decision.
While a joint paper prepared by the International Monetary Fund and the
Financial Stability Board
had suggested that a ban won’t work, it had proposed a detailed roadmap for regulating cryptocurrency.
But regulation may also mean that crypto issuers and exchanges will have to rework the model that they have operated in. For instance, the officer said a structure like the stock markets may have to be adopted to split the activities of a crypto exchange and align them with how a stock market works with a clearing house, depositories and other intermediaries, addressing the risks that the collapse of some crypto exchanges have thrown up.
The official explained that the joint paper has laid out the minimum regulation countries should adopt and pointed to the suggestion that emerging markets, which face greater risks, may need to go above the base level.
The officer also said a ban by one country would only result in the market moving elsewhere. Besides, it would be difficult to monitor every device to impose the ban.
But with Know Your Customer (KYC) and other norms kicking in, some of the concerns around anonymity would be addressed, the official explained.
“Now that G20 leaders have endorsed it (FSB recommendations), ministers and governments will discuss it and take it forward. We expect a lot of discussion to happen on how to implement it faster, swifter and more comprehensively,” said the official.
“We have a good framework to decide our way forward. The foundation is ready, beyond that how much we want to go is for us to decide in coming months and take a call,” added the official.
India has been pressing for global regulation on cryptocurrencies to tackle tax evasion and round tripping of funds.
The Reserve Bank of India (RBI) has asked for a complete ban on cryptocurrencies, like Bitcoin and Ether, saying they are akin to gambling.
“If you want to ban it (cryptocurrency), go ahead and ban it. But if the rest of the countries are not banning it, it will be extremely difficult for one country to ban it. We have to take up that discussion and try to build a consensus on regulation. Then we gradually decide on our own system,” the official said.