Former reserve bank official recommends India to accept crypto
Former Deputy Governor of Reserve Bank of India (RBI), Rama Subramaniam Gandhi, has spoken about the global cryptocurrency ecosystem, stressing the need for India to officiate digital wallets soon.
Organized by the Blockchain and Crypto Assets Council of the Internet and Mobile Association of India, the Hodl 2021 virtual saw Gandhi discussing cryptocurrencies at the inaugural session. He stated that although crypto tokens can be used in payments, he sees them as more of an asset class.
Concerning legislation about cryptocurrencies, the Indian government hasn’t given a clear stance yet. However, earlier in September, the authorities disclosed that it is currently working on a draft cryptocurrency bill. The proposed bill would enable the public to use it as commodities, and the crypto tokens would be taxed. If the bill manages to pass, cryptocurrency could be used for trading and investment as assets, and not for payments in India.
In 2018, India’s central bank, RBI, had banned the country’s commercial banks from accepting any cryptocurrency-related transactions, but the ruling was overturned in February 2020 by the Supreme Court of India.
Amid the government’s hesitation and ambiguity, Gandhi, who had served at the bank between 2014 and 2017, maintained that cryptocurrency in India must be treated as a commodity and should be taxed accordingly. He insisted that developing a legal framework for the same would allow Indians to invest in and hold digital assets.
Gandhi added that if the digital assets are not purchased but mined, they must be taxed with capital gains.” That is like voluntary disclosure,” he said.
Explaining the need for a regulatory framework, Gandhi said that if not regulated, cryptocurrencies would increasingly allow criminals to misuse them. Hence, he opined, it is necessary to track all crypto transactions through a central repository so no illicit use can be made of the digital assets.
In the conference, Gandhi expressed the need for independence over one’s financial assets, stating that the government must, therefore, have “an open mind toward economic transactions involving cryptocurrencies.”
Gandhi welcomed government regulations on cryptocurrencies stating that the public must adhere to regulations to avoid the potential dangers caused by blockchain’s anonymity features.