Hello friends,
I am doing good, and I hope that you are having a good time with your near and dear ones.
If you are in India then you can not ignore whatever is going on in the country. Most of the updates that we get to know through the media talk about the regulation and bringing some framework. This has been happening for a long time and a few weeks back there was an update that they are preparing a database for crypto users and exchanges. I am not so good in terms of technology so I don't know how it will work.
The government is saying in public that they are working on the blockchain and they are also working on the Cryptocurrencies to figure out how to deal with it. India has a financial body known as the Reserve Bank of India and it is known as RBI in short. This is the government body that controls all banks and financial institutions in the country and they also create monetary policies. This week the RBI governor gave an interview to the media and whatever he discussed was not at all positive for Bitcoin and cryptocurrencies. He was pushing more adoption for the cbdc which is also a form of digital currency but it will be backed by the primary currency.
As per the RBI governor, stablecoins and cryptocurrencies have no backing and they can collapse anytime but the primary currency cannot because it is backed by the government. He also mentioned that the CBDC is the digital form of primary currency hence it is backed by the government in the same way.
Exchanges that are doing crypto business in India are not happy with the way RBI is creating problems. The current situation is a little contradictory because the government is showing the people that they are crypto-friendly but RBI is not at all friendly. Despite all these several users are going to India to deal in Cryptocurrency coins. In the current situation the crypto is neither legal nor illegal in the country. Anyone can buy and hold any crypto coin as long as they want. The tax is applicable with a percentage of 30% which means if you make some money on Crypto then your income will be taxed by 30%. This is another bigger percentage and the community is not at all in favor of this tax rate.
India has a slab system for taxation but when you think about crypto that system is not applicable and they have made it very clear. Now no matter what happens with your crypto transactions even if one transaction can make you some profit, it is taxable. Because of this arrangement and treatment in the country for crypto users and companies, the exchanges in India are not happy. Some of the exchanges have already moved their offices to another country and they are operating virtually. Some foreign exchanges also have stopped their operations because of these ongoing issues and no clarity from the government.
The government needs to clear whatever they are going to do because this way people who invest in this segment can get to know how the government will bring regulations or any guidelines for the Crypto market.
Thank you