The Cryptocurrency Dilemma in India

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The Cryptocurrency Dilemma in India

ForexMinute.com – A recent lecture conducted at Vadodara’s Ahmedabad Management Association (ANS) by a local chartered accountant Sanjeev Shah was the talk of the evening when he highlighted the inability of Indian government to bring any definite cryptocurrencies laws.

Shah stressed on the facts that despite of issuing a warning, which dates back to December 24 previous year, the Reserve Bank of India has done nothing about implementing a definite protocol for tackling virtual currencies trade. He also presented his own concerns over the legality of these coins and its possible future in the country of over a billion people.

“According to Indian laws, virtual currencies are not defined so far,” said Shah, “While the US treats it as commodity, in India we don’t know whether it is commodity, goods, securities or currency as each is regulated by a different law.”

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He added, “The debate is still raging across the world on how to treat it. While it is not illegal per se, it carries non-legal financial risks as pointed out by the RBI. It poses issues such as, how to calculate tax on the incomes received on the investment or transactions that have taken place in non-physical currency.”

The man directly referenced December’s press release of RBI which warns the users and traders of the possible negative impacts of cryptocurrencies, including financial, operational and security-related risks. He then criticized the RBI’s negligence in setting a proper frame for using and trading cryptocurrencies, due to which many people had to lose their hard-earned money.

His words find its reference in the December 25th raids conducted on Bitcoin entrepreneurs and traders by Enforcement Directorate on the grounds of current foreign exchange laws in India. The Indian laws considers to frame such activities on the basis of money laundering.

Shah although provided a solution that has been also adopted by several other central banks. “It is still a concept in its nascent stage,” he said, “that has potential to mature. If the purchase is made out of legal funds and seller is properly identified, we may reduce the risk of illegal activities. Still, it should be opted only by those who understand online market, have high risk appetite and know the technology.”

[Source Credits: The Times of India]

To contact the reporter of the story: Yashu Gola at yashu@forexminute.com