As many are talking about the crypto judgment passed by The Supreme Court of India, most have misunderstandings about the crypto ecosystem. Hence, we decided to bust some myths of dealing with Cryptos in India. We reached out to Mr.Sidharth Sogani, Founder and CEO of CREBACO Global Inc, India’s only research and intelligence company focused on Blockchain and Cryptocurrencies.
Purchase of Bitcoin via banks makes it legal or Purchase in cash makes it illegal.
Fact: Neither makes it legal, the ban was on the purchase method (via banking). Currently trading in it is fine, but we still await regulations from the government.
Now is trading in Bitcoin and other altcoins legal?
Fact: Now you can buy crypto from banks, but it’s not a legal tender like our rupee notes. A legal tender says ‘I promise to pay the bearer’ and RBI takes responsibility for that. Bitcoin can never be a legal tender, will be treated as a commodity or decentralized digital currency.
Myth 3: Things that are not regulated cant be legal? Hence we cant do business in unregulated areas.
Fact: Countries like Singapore and even the USA have witnessed 100s of ICOs and those projects have raised billions of dollars. The concept of having regulations in place for doing business is an orthodox approach. Technologies today have inbuilt protocols.
Can I do Crypto Business in India now?
Yes, there was never a ban on doing crypto business in India. The ban was mainly for the banks to not deal with crypto companies. This made it impossible to do business here. Many companies still managed during this phase, but many also had to shut down.
Now as the ban has been lifted, one can do business with normal banking relationships in India.
Myth 5: The government and regulators have assumed that banning crypto will be beneficial for the investors and the people of India.
Fact: Governments can not ban Bitcoin because it is decentralized. Hence the question of Ban never arises. But regulating crypto can be very beneficial for the country. According to the CREBACO report last year, India has a 13 Billion dollar potential market size and it can create 20000+ jobs in the very first year. That’s because of world-class tech minds in India. Indians are at the top tech positions in all major MNCs in the world! Bitcoin is a great FinTech opportunity for all of us.
Can I make a career in the Crypto industry in India?
Fact: Yes you can, there is no harm in working for a crypto company. It is a nascent market and has great potential and scope to grow.
Can we accept Crypto payments?
Fact: Yes, now as banking relationship is re-established, you can accept crypto payments and encash it through the exchanges. You must declare the date of receipt of crypto, the current price at the time of receipt and conversation in Indian Rupees, and declare the same in your income. Please note, you must declare all your transactions with tax authorities and pay taxes. Crypto is not taxfree!
How should there be taxation on crypto in India?
Currently, this is a grey area. Many chartered accountants have different approaches to it. But the most likely it is similar to gold and other commodities. If received as payment against goods or services it is treated separately and if invested into Bitcoin or other altcoins, it shall be treated separately. You must consult your CA for this.
Indian VCs are not investing in Crypto and Blockchain projects?
Fact: Many VCs have invested in blockchain and crypto projects in India. They were reluctant as there has been no regulation, but visionary funds are continuing to invest in new innovative technologies. With the lifting of the ban, we are sure to see many startups and VCs jumping in this space as it is a good market.
Banks are not allowing to open bank accounts?
Fact: Earlier the banks were not allowing the banking relationship with crypto companies due to the banking ban led by RBIs circular. But as now the ban has been lifted, and banking relationship can be done normally. Even though the judgment is recent, it will take a few months for everything to come back to normal.
Is blockchain and crypto different?
Fact: Yes they are but it’s like two sides on the same coin, a truly decentralized blockchain cannot ideally work without a crypto token. Blockchain is a technology that has many uses and is being explored.
Further to this what is your opinion on the Bitcoin and Crypto space in India following this judgment?
Well, this judgment has definitely reduced reluctance in Indian investors and the crypto community. But many misunderstand Bitcoin to be regulated now. Let me make one thing very clear; we still do not have any regulations from the central government. This judgment just marks the RBI’s stance to be unconstitutional. As I have understood with the help of legal professionals, the RBI may challenge it as a review application, but there is a very low possibility of it getting admitted. Even though, the judgment is a historical one, but It is still very early to call Bitcoin regulated in India. We at CREBACO await clear regulations from SEBI, RBI, Ministry of Finance and Income Tax Department to clarify treatments of Investments, Trading, Payments, Initial Coin Offerings, Security Token Offerings, Initial Exchange Offerings, Exchange Regulations, and Compliance standards. Its a completely new financial framework and a lot of work have to be done together with all the departments. As India aims to be a digital power in the coming few years, it is important for us to act fast.
But at the same time, don’t make your indecisiveness delays that lead to disasters as other jurisdictions are moving faster
CREBACO plans to organize a sandbox and an open panel to discuss the way several departments should regulate digital assets.
We want to bring crypto industry professionals, government, Key Opinion Leaders, media and corporates to have a dialogue to fasten the process of crypto and blockchain adoption.
CREBACO Global Inc is a world-leading research and intelligence firm focused only on Blockchain and Crypto projects having a comprehensive research database of over 2500+ projects globally. CREBACO works with governments and regulators building better legal and regulatory frameworks for cryptocurrencies.
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