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Business‘Need to regulate cryptocurrency’

‘Need to regulate cryptocurrency’

Published: 12th Jul 2021 12:03 am

Hyderabad: If you are a tech-savvy investment junkie, then cryptocurrency is something that you have put your money in. And even if you have not invested, then you must have heard about the term.

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Cryptocurrencies like Bitcoin and Etherum have gained popularity in the last few years and the last few months, the value of this currency has grown multi-fold – all thanks to Elon Musk and his love of digital currency.

Closer home, Finance Minister Nirmala Sitharaman also opened the floodgates of the currency by saying that a Cabinet note on the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is ready and it is up to the Cabinet to pass the bill. Not just this, one of US-based crypto exchange firm, Coinbase announced its expansion plan to India and looks to add more employees to its office in Hyderabad.

While all of this might spell good news for crypto enthusiasts, many experts from the field opine that the current regulation is mostly self-regulatory. “India is home to 300 crypto firms and the first crypto launched by a Bengaluru firm features in the top 20 list globally. This shows the potential that the country holds in this segment. While KYC compliance is already happening, there is no regulation in place to check any kind of suspicious trading activity,” said Sunil Agarwal, dean, Blockchain programme, TalentSprint.

Echoing similar sentiment, a startup that works in bridging the talent gap in the crypto space, QuestBook co-founder Abhilash Inumella says that taxation in crypto trading and the lack of good talent is the major challenges hampering the growth of the sector. “If the government can look at a regulation that will encourage more investments in crypto startups then it will go a good boost,” he said.

According to Agarwal, three major and simple regulations need to be put in place by the government. One is defining cryptocurrency – whether it is a commodity or security or is it a utility; second is that the government must build a taxonomy of cryptocurrency or digital currency and third is how the country will launch its digital currency like a Central Bank Digital Currency (CBDC). “The government has been tight-lipped on the fundamental legal questions and they need to be answered,” he said.

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