India already has more than 20 million investors, who have invested in crypto assets and this asset is gaining popularity amongst crypto enthusiast and financial investors. It is, therefore, imperative that the Government regulates such assets by introducing a law that will lend certainty and legitimacy to holding and trading in crypto assets.
Presently, there is all pervasive ambiguity and confusion regarding the legality of such assets. It is not clear whether such assets are goods, securities or a currency; whether it is legal to hold and trade in such assets and the quantity in which such assets may be held (as under Indian foreign exchange laws a maximum remittance of USD 250,000 per financial year is permitted for acquisition of capital or financial assets abroad).
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Also, a few banks have been reluctant in permitting remittances or providing services for settling crypto trades although Supreme Court has struck down the revenant RBI circular that restricted banks from offering services for dealing in or settling trades in crypto assets. The proposed law should not only clarify on all the above issues, but also deal with rampant advertising and promotion of such assets as means of generating quick wealth. A progressive financial regulator shall be nominated to regulate and put best practices for trading in crypto assets and promoting the use of underlying block chain technology.
Views expressed in this article are the personal opinion of Manvinder Singh, Partner, J Sagar Associates (JSA).
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