Need of the hour to regulate cryptocurrency in India; says the industry

Creation of regulation for cryptocurrency is one of eight priorities under India’s G20 presidency, Finance Minister Nirmala Sitharaman said at the Indian Council for Research on International Economic Relations (ICRIER), early month, adding that, “digital financial technology is moving speedily forward in India.” Indeed the recent FTX fiasco is anything but proof of it. “Many market participants are frantically looking for greater regulatory clarity and predictability. This calls for new guidelines as well as norms and regulations,” Raj A Kapoor, founder, and CEO, India Blockchain Alliance told FE Blockchain.

Bolivia, Bangladesh, Ghana, and Nepal are some of the countries which have banned cryptocurrency. The below-mentioned report by Statista, a Germany-based market, and consumer data company,  shows countries and regional economies where cryptocurrencies are banned as of November 2021.

According to Dileep Seinberg, founder and CEO, MuffinPay, a bill payment company noted that there is a dire need for consistent regulation in the cryptocurrency space because it will legalise the business which is in the grey area due to the recent FTX collapse. “Cryptocurrency players will know their boundaries and have clear instructions for the operations,” Seinberg noted.

Additionally, the Finance Minister claimed that regulating cryptocurrencies was in the best interest of India due to the possibility of transactions being used for ‘drug funding,’ or ‘terror funding’. 

As per industry experts, crypto regulation is an opportunity for the industry to work together and exercise self-regulation. “Stable, low-risk business and financial management are impossible without a proper strategy and dedicated team in managing trading businesses in bull and bear cycles,” Johnny Lyu, CEO, KuCoin, a crypto exchange company noted.

As per data by KuCoin, ‘Into The Cryptoverse India Report’ survey, one-third of 115 million cryptocurrency investors are concerned about the nature of the yet-to-be-rolled-out regulation by the Indian government.

Meanwhile, industry observers noted that a comprehensive regulatory and supervisory framework including anti-money laundering (AML) and combating the financing of terrorism (CFT) requirements would also be a focus as it would offer interplay between the Virtual Assets Law and other regulatory bodies. Moreover, jurisdiction compliance and repercussions will be included as a focus area.