India needs to establish cryptocurrency rules to remove regulatory uncertainties, protect investors and boost its crypto sector, CoinSwitch CEO Ashish Singhal said on Sunday.
Although the central bank of India has backed a ban on cryptocurrencies over risks to financial stability, a move by the federal government to tax income from them has been interpreted by the industry as a sign of acceptance by New Delhi.
“Users don’t know what’s going to happen to their holdings – will the government ban, not ban, how will it be regulated?” Singhal, a former Amazon engineer who co-founded CoinSwitch, told Reuters at the World Economic Forum in Davos.
CoinSwitch, which is valued at US$1.9 billion (approx.) Based in India’s main tech hub Bengaluru, the company is backed by Andreessen Horowitz, Tiger Global and Coinbase Ventures.
“Regulations will bring peace…more security,” he added.
Blockchain and cryptocurrency companies are heavily represented at this year’s Davos gathering, which coincides with a time when crypto prices are plummeting around the world.
India’s central bank has raised “serious concerns” about private cryptocurrencies, but Prime Minister Narendra Modi said in December such new technologies should be used to strengthen, not undermine, democracy.
Exchanges in India often struggle to work with banks to facilitate fund transfers, and in April CoinSwitch and some others disabled rupee deposits through a widespread state-backed network, alarming investors.
While steps on taxation and certain advertising regulations have brought some relief, much more needs to be done, Singhal said, adding that India should develop a series of laws.
These should include norms for identity verification and crypto-asset transfers, while India should set up a mechanism for exchanges to track transactions and report them to any authority if necessary.
Although no official data is available on the size of the Indian crypto market, CoinSwitch estimates the number of investors to be as high as 20 million with total assets of around US$6 billion (roughly Rs.46,580 billion).
The regulatory uncertainty was widely felt. In April, Coinbase, the largest cryptocurrency exchange in the United States, launched in India but stopped using a government-backed interbank money transfer service within days.
Coinbase CEO Brian Armstrong later said in May the move was prompted by “informal pressure” from the central bank of India.
CoinSwitch has also paused so-called UPI transfers to hold talks with banking partners and make them more convenient, Singhal said in the interview. He added that CoinSwitch is in talks with regulators to try to restart the transfer service.
“We are pushing for regulations. With the right regulation, we can create clarity,” he said.
© Thomson Reuters 2022
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https://gadgets360.com/cryptocurrency/news/coinswitch-calls-regulatory-peace-resolve-uncertainty-protect-investors-india-3000200 CoinSwitch CEO says India needs to resolve regulatory uncertainties, protect investors and promote crypto