Indian exchanges will turn to authorities with proposals to regulate cryptocurrencies

The cryptocurrency industry in India is once again facing tough regulatory constraints from regulators. Local media report that India is preparing for a complete ban on cryptocurrencies, and before that, the Indian government may introduce double taxation of crypto assets. In addition, last week, Indian legislation was amended to require local exchanges to report all cryptocurrency transactions.

Now cryptocurrency exchanges intend to clarify issues of digital asset regulation with government authorities. The Blockchain and Cryptocurrency Development Committee, chaired by the non-profit organization Internet and Mobile Association of India (IAMAI), has prepared a special document for this. It will set out recommendations for regulating the cryptocurrency industry and possible ways to eliminate the risks associated with it. We are talking about money laundering, the use of cryptocurrencies in illegal activities, threats to the state currency and the negative impact of mining on the environment. The document will be submitted to the Reserve Bank of India (RBI), Indian Finance Minister Nirmala Sitharaman, and the Indian Ministry of Electronics and Information Technology.

Co-founder and CEO of WazirX exchange Nischal Shetty said that the presentation outlined the possible implications of the upcoming ban on cryptocurrencies and the global practice of regulating the digital asset industry. In addition, the document contains a “code of conduct” for cryptocurrency exchanges. This is the first time participants in the cryptocurrency industry are sending such materials to the government, Shetty said.

“We hope to be invited to discuss the regulatory issues in detail. We didn’t want to wait, so we took the initiative ourselves, ”said the head of WazirX.

Recently, RBI Chairman Shaktikanta Das reiterated his grave concerns about cryptocurrencies and advocated banning them because he believes they threaten financial stability. However, Unocoin exchange co-founder and CEO Sathvik Vishwanath said that between 2015 and 2018, Unocoin and other exchanges have already approached RBI on numerous occasions in an attempt to clarify how cryptocurrencies work in order to allay regulator’s concerns.

“We have already tried to ‘reach out’ to senior RBI officials, but it was only a one-sided conversation. We sent documents with explanations, but that was the end of it – our requests remained unanswered. We were never able to find out what the regulators want, ”added the co-founder of Unocoin.

When the RBI banned the use of digital assets in the country in 2018, many crypto exchange executives engaged in informal conversations with federal lawmakers, Vishwanath said. With the cryptocurrency ban re-emerging, the industry has redoubled its efforts to address the concerns of the Central Bank of India. Vishwanath explained that the cryptocurrency industry has begun to self-regulate by implementing a KYC procedure to combat illegal activity.