Government and industry stakeholders share views and deliberate on dealing with this new-age disruptive technology
The Business Today’s Crypto Conclave presented by CoinDCX, held in the national capital on March 22, saw both government and industry stakeholders put forth their views on various possibilities that the disruptive blockchain technology has to offer and the importance of recognising digital virtual assets going forward.
Setting aside any confusion that comes with owning cryptocurrency, Union Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, said that there was no ban on owning crypto assets in India. “There’s clearly a recognition that the digital virtual asset is a category of assets going forward, whether it’s an NFT or crypto, or even something else in the future people will start accumulating through the liberalised remittance scheme (LRS) or any other way,” Mr Chandrasekhar said.
The Minister clarified that the government’s approach to policymaking is not slow, but measured, with a lot of public consultation, and making the right moves with the right amount of knowledge, consultation and an engagement with the principal stakeholders of the industry and the ecosystem.
Putting out the government’s view, Mr Chandrasekhar explained: “The rupee obviously, is not a fully convertible currency and therefore, there are restrictions on how you can use the rupee to buy assets that are non-rupee assets. And, the RBI has laid down many ways of doing that. The LRS is the easiest way for an individual to invest in any asset he or she wants, and there is no disqualification from anybody owning a crypto asset as part of his portfolio of assets.”
On the issue of taxation, the minister clarified that it was only a matter of time. “These are things that evolve over time and as you know, in anything that is unknown or less understood, usually the instinct is to tax it at a higher rate. And then as people become comfortable with it, those tax rates obviously moderate,” he said. With regard to domestic crypto assets, Mr Chandrasekhar said he thought that after the RBI issues the CBDC, which will be the digital Rupee, things will become clear about issuance, mining and minting. “There are also questions asked about existing crypto exchanges, crypto brokers, P2P types of trades on cryptos. What happens, who regulates them? And I think that will evolve,” he said.
Also at the Business Today Crypto Conclave was Rajnish Kumar, Chairman of BharatPe, and former chairman of SBI, who said he believed crypto is the buzzword of the new-age economy and is not defined by national boundaries. “I would not be surprised to see crypto as a currency for international transactions over the next 10 years,” he said. Speaking alongside, former finance secretary Subhash Chandra Garg however explained that the moment e-dollar or the digital dollar comes in, the global currency will retain the primacy it has today in the international payment system. “Digital rupee, whenever it will come, will have a very small role to play because the rupee is not an international currency,” Mr Garg said.
On the regulations front, the former finance secretary pointed to how the crypto world had three kinds of phenomena, which include currency, services, and assets like NFT. “These crypto platforms are today recognised as decentralised autonomous organisations and require different ways to regulate,” he said. Pointing to how experts believe that there is a need to understand the technology, Mr Garg said, “We are over-possessive and over-focussed on the currency. There is still a lot that is not understood.”
Former Union Minister of Law, Communication and IT, Ravi Shankar Prasad, while speaking at the conclave sounded a note of caution by saying that crypto is a disruptive technology and maximum care should be taken when walking on this ground. He also emphasised the fundamental difference between crypto and the blockchain technology on which the former is based. “We have never been against blockchain, in fact, we encouraged blockchain technology, I think it will be and should be encouraged. I must say that blockchain is a technology and the cryptocurrency is just a part of it,” Mr Prasad said at the conclave.
Other prominent names who deliberated at the Business Today Crypto Conclave were BJP Lok Sabha MP Jayant Sinha who spoke on how the government’s approach on crypto is being formulated by discussions with stakeholders and observations of evolving global situations. Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas, observed that nobody still understands crypto yet and batted for increased awareness, while N.S. Nappinai, Supreme Court advocate and Founder of Cyber Saathi, pointed to it being used as a payment mechanism and the issues of regulation.