Indian crypto exchanges under regulations of RBI

[Bitcoin Smith]

when I was reading an article from cointelegraph : India working on 5-point crypto legislation as ban is ruled out

Indian crypto platforms could attain similar status as authorized dealers (similar to banks) under the guidelines of the Indian central bank, RBI.

Talking about the five-point framework, Sogani noted that the government is focusing on:

1.Setting up advanced Know Your Customer (KYC) for crypto companies, which covers the Foreign Account Tax Compliance Act and existing Anti-Money Laundering standards.

2.Crypto platforms would be required to release proof-of-reserve audits on a real-time basis to regulators.

3.A uniform taxation policy across the nations.

4.Crypto exchanges could gain the same status as authorized dealers (similar to banks) under the guidelines of the Reserve Bank of India (RBI).

5.Key positions may be mandatory, such as Money Laundering Reporting Officer for crypto platforms.
Sogani noted that the world has realized that banning crypto is futile and that several nations are moving toward a regulatory approach rather than a blanket ban.

Just another speculation post G20 summit, but it seems something positive cause its more visible that the ban is ruled out so governments are now trying to adapt to the policies that will regulate the crypto assets further rather than just vague 30% capital gains and especially exchanges will attain the status similar to banks caught me.

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[pakhitheboss]

RBI is the reason why we have tax but nil regulations. They were the ones advocating a complete ban in Bitcoin and cryptocurrency. Now they will become the in charge of cryptocurrency exchanges. This is not looking good although they have ruled out a ban but still they can again place a blanket ban if this kind of regulatory framework comes in India.

Back in 2018 they were the ones who placed a blanket ban. They never bothered to inform the government about it and directly forward a directive to all banks. If they start controlling Indian crypto exchanges they can place harsh directives. Already with the tax law a lot of exchanges have reported low volume. Next they might shut shop or move out of India.

I don't understand how can a local fiat currency regulator and decision maker decide about cryptocurrency. The RBI governer has said multiple times in Public that crypto is a threat to India. If he thinks in such a manner then would he allow it to survive in our economy. It is a bad idea to give RBI control, it would have been wise if a seperate body would have created in this area.

[Bitcoin Smith]

Even though it is bad, but RBI has no choice other than regulating the crypto market if that is what government want and most likely that is the possibility if I am not wrong. But yeah, crypto regulations should not fall under RBI or else they will not allow it to grow and will restrict people in any possible way. Thanks for the opinion though, which acts as an eye-opener for me regarding this kind of approach.

[teosanru]

when I was reading an article from cointelegraph : India working on 5-point crypto legislation as ban is ruled out

Indian crypto platforms could attain similar status as authorized dealers (similar to banks) under the guidelines of the Indian central bank, RBI.

Talking about the five-point framework, Sogani noted that the government is focusing on:

1.Setting up advanced Know Your Customer (KYC) for crypto companies, which covers the Foreign Account Tax Compliance Act and existing Anti-Money Laundering standards.

2.Crypto platforms would be required to release proof-of-reserve audits on a real-time basis to regulators.

3.A uniform taxation policy across the nations.

4.Crypto exchanges could gain the same status as authorized dealers (similar to banks) under the guidelines of the Reserve Bank of India (RBI).

5.Key positions may be mandatory, such as Money Laundering Reporting Officer for crypto platforms.
Sogani noted that the world has realized that banning crypto is futile and that several nations are moving toward a regulatory approach rather than a blanket ban.

Just another speculation post G20 summit, but it seems something positive cause its more visible that the ban is ruled out so governments are now trying to adapt to the policies that will regulate the crypto assets further rather than just vague 30% capital gains and especially exchanges will attain the status similar to banks caught me.

Until and unless RBI curbs the heck out of the freedom from these exchanges I see this as a very welcoming move. Not only because we are in situation of no laws yet full tax but also because this would give a big certainty to a lot of people that bitcoin is not illegal atleast whatever we guys are doing is absolutely legal comes under the ambit of RBI. but yes practically I don't know how stringently will RBI act with these exchanges.

[avikz]

This entire thing makes sense because right now we pay 30% tax but we have no regulatory framework available. The crypto market in India is a bit of nonsense with all these India made exchanges. A regulatory framework will greatly help the crypto adoption in the country if the tax rate is kept at per with other income. 30% tax 8s a big no!

If RBI rolls out some favorable cryptocurrency framework, I am sure it create great impact. Only the tax rate the matter of concern.

[pakhitheboss]

Even though it is bad, but RBI has no choice other than regulating the crypto market if that is what government want and most likely that is the possibility if I am not wrong. But yeah, crypto regulations should not fall under RBI or else they will not allow it to grow and will restrict people in any possible way. Thanks for the opinion though, which acts as an eye-opener for me regarding this kind of approach.

In a way, they are restricting the growth of the crypto market in India by giving RBI the authority to regulate it. I am surprised none of the big community members and the owners of crypto exchanges are questioning this decision. RBI was the one that had stopped the government from implementing regulation and wanted a complete ban. The government should come up with a different regulatory authority for crypto. They have a SEBI to regulate the share market, RBI does not have any jurisdiction in the Indian share market. This shows the government does not consider cryptocurrency as a commodity, it still considers it as a digital currency which is meant for gambling. Believe me, we won't see a deduction from the existing tax slab if this shit continues. I am expecting very harsh regulation from the government of India.

[elevates]

Indian crypto platforms could attain similar status as authorized dealers (similar to banks) under the guidelines of the Indian central bank, RBI.

That policy is concerning as we are here because we hate Banks! Arent we were countering banks and other financial institutions! Then why give a bank status to a crypto exchange? I believe we would need more details before coming to any conclusion. I do think this is a bad idea for the Indian crypto community if it actually happens. We have seen in the past how they became a good example of a carrot-and-stick approach. What I meant was RBI would be holding the carrot and Indian exchanges would become the donkey.

[Bureau]

1.Setting up advanced Know Your Customer (KYC) for crypto companies, which covers the Foreign Account Tax Compliance Act and existing Anti-Money Laundering standards.

What does advanced Know Your Customer means, will they now come to our house and do manual verification?

2.Crypto platforms would be required to release proof-of-reserve audits on a real-time basis to regulators.

That would determine how much liquidity an Indian exchange has and it would create awareness & increase trust among users.

3.A uniform taxation policy across the nations.

I am not sure if a uniform taxation policy would get a consensus. A lot of cryptocurrency communities are based in third-world countries. I do not think it will be approved.

4.Crypto exchanges could gain the same status as authorized dealers (similar to banks) under the guidelines of the Reserve Bank of India (RBI).

I am not sure it will happen and I think this is just a speculation. I think we would find major changes on this topic as there would be a lot of objections from the Indian crypto community. I think it is better to wait for an announcement from the government.