CoinSwitch’s chief executive officer, Ashish Singhal, stated that India has to adopt rules on digital coins. The CEO believes that adopting rules will be vital in removing regulatory uncertainty. Besides, the rules will safeguard investors and grow India’s cryptocurrency business.
The sector sees a proposal by the federal government to tax income from cryptos as a gesture of approval by New Delhi. Yet, India’s central bank has supported a ban on cryptos citing financial instability. They argue that cryptos pose threats to the country’s financial stability due to their volatility.
Singhal, the CoinSwitch co-founder, made some remarks at the World Economic Forum in Davos. He said that a lot of uncertainties are facing users. They aren’t aware of what will happen to their holdings, whether the government will ban or not ban them, or how the government will regulate the cryptocurrency sector.
CoinSwitch claims to be the largest crypto start-up in India. Thus, it boasts of a market cap worth $1.9 Billion and more than 18 Million users. The cryptocurrency investing app has its headquarters in Bengaluru, the primary technological hub in India. Its investors include Andreessen Horowitz, Tiger Global, and Coinbase Ventures.
The CoinSwitch CEO believes that having rules in the crypto sector will offer tranquility and assurance to holders. Firms dealing in blockchain tech and cryptos have a significant presence at Davos’s gathering. The World Economic Forum is taking place when crypto prices are falling across the globe.
The crypto debate saw India prime minister Narendra Modi make his contribution. Modi said that emerging technology should promote democracy rather than harm it. Yet, the central bank has held its ground and holds serious worries about private cryptos.
CoinSwitch and a few other exchanges disabled rupee deposits through a widely used state-backed network in April. Thus, causing the investors to become alarmed. This was one of the many challenges that exchanges face in India. As a result, it is hard to form partnerships with banks in India to ease funds transfer.
Singhal stated that recent changes to taxation and certain advertising rules had offered some relief. However, he believes there is still a significant amount of work to streamline the sector. He also recommended that India adopt a set of rules.
The regulations should include verifying identities and transferring crypto assets. Moreover, India should establish a structure that allows exchanges to track transactions. The system should also report them to anybody who requires them.
Currently, there is no official data available on the size of India’s cryptocurrency sector. Yet, CoinSwitch estimates up to 20 million investors, with total holdings of over $6 billion.
Uncertainty around regulatory requirements has been keenly felt by many. Coinbase, the largest crypto exchange in the United States, began working in India in April. However, within days of the launch, the company halted its usage of an inter-bank fund transfer service.
After more queries, Coinbase CEO Brian Armstrong said the firm was under pressure to make the decision. He said the government of India was the force behind the pressure.
According to what Singhal said about CoinSwitch in the interview, the entity has also delayed so-called UPI transfers. The delay allows for discussions with banking partners to make them feel comfortable. He also said that CoinSwitch talked with the relevant authorities to relaunch the transfer service.
Yet, the authorities have concerns about money launders who might use cryptos due to their decentralized nature. Moreover, being a member of the Financial Action Task Force, India must adhere to norms. The norms encourage the worldwide cooperation of member states.
Nonetheless, the crucial role of financial regulators is to safeguard the interests of investors at all times. When viewed through the lens of regulatory authorities, crypto-assets attract skepticism. Besides, they are a speculative asset that lacks any underlying value. There are over 10,000 cryptos in circulation globally, and all have a high degree of price volatility.