CEO of leading Indian exchange calls for regulatory clarity
CoinSwitch’s Ashish Singhal says regulatory uncertainty is prompting user anxiety
The CEO of one of India’s largest cryptocurrency exchanges has called for greater regulatory clarity to help develop the burgeoning sector and protect investors.
Speaking to Reuters at the World Economic Forum in Davos, CoinSwitch’s Ashish Singhal said: “Users don’t know what will happen with their holdings – is the government going to ban, not ban, how is it going to be regulated?”
Central Bank hostility
As in many countries, the situation of the cryptoasset sector in India can be described as precarious, with attitudes differing among state institutions.
The nation’s central bank has consistently voiced its opposition to the decentralised media of exchange. Figures such as Reserve Bank of India (RBI) deputy governor T Rabi Sankar have described an outright ban as “perhaps the most advisable choice”.
In 2018, the RBI banned bank payment systems from being used for cryptocurrency-related payments. The Supreme Court’s decision in 2020 to overturn this ban triggered a surge in cryptocurrency investing.
Perhaps in an effort to mollify central bank hostility when introducing this year’s national budget, finance minister Nirmala Sitharaman announced the government’s intention to levy a 30% tax on any income generated from cryptocurrency transactions and a second tax of 1% at source on all transactions. She also pledged to introduce a digital rupee by the end of the financial year.
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Across the globe, central bank digital currencies (CBDCs) have been seen by central banks as a way to harness the blockchain technology pioneered by cryptocurrencies while maintaining centralised control.
Singhal’s comment that “regulations will bring peace” comes in the wake of Coinbase’s frustrated launch in India.
The US company announced that its Indian investors would be able to use India’s popular online payments system, UPI, to transfer money to its local exchange.
Shortly afterwards, the National Payments Corporation of India (NPCI) released a statement saying that it was “not aware of any crypto exchange using UPI”.
Coinbase promptly paused its use of the UPI, with CEO Brian Armstrong later saying the decision was triggered following “informal pressure” from the RBI.