India cooperates with IMF on crypto consultation paper

May 31, 2022 Coin Telegraph

The document, which could define a national framework for digital assets, is almost ready.

The Department of Economic Affairs of India is finalizing a consultation paper on crypto currencies, which then will be handed over to the federal government. The implementation of the document could bring the country of 14 billion people closer to the international regulatory consensus on digital assets.

On Monday, May 30, during an event hosted by the Ministry of Labour and Employment, Economic Affairs Secretary Ajay Seth revealed that his department is finishing the work on the consultation paper, which would define the nation’s stance on crypto.

The document was crafted in cooperation with industry stakeholders, the International Monetary Fund (IMF) and the World Bank. Seth specified that the paper would strengthen India’s commitment to “some sort of global regulations”:

“Digital assets, whatever way we want to deal with those assets, there has to be a broad framework on which all economies have to be together.”

Answering the question about the possible outright ban, the official acknowledged that any national-level prohibition wouldn’t work in isolation:

“Whatever we do, even if we go to the extreme form, the countries that have chosen to prohibit, they can't succeed unless there is a global consensus.”

In recent years India has been demonstrating a rather militant posture when it comes to crypto. In 2017 the Reserve Bank of India (RBI) and the Ministry of Finance compared the digital currencies to Ponzi schemes and prohibited any operations with them for commercial banks and lenders.

In 2022, long after the ban had been formally lifted, the RBI warned about the threat of “dollarization” that crypto poses, while in his recent virtual speech at the World Economic Forum in Davos, the prime minister Narendra Modi called cryptocurrency a global challenge that demands a “collective and synchronized action” from all of the national and international bodies.

India to roll out CBDC using a graded approach: RBI Annual Report

May 28, 2022 Coin Telegraph

CBDC

Halfway through 2022, at the proof of concept stage, RBI is in the process of verifying the feasibility and functionality of launching a CBDC.

Further cementing India’s decision to introduce an in-house central bank digital currency (CBDC) in 2022-23, the Reserve Bank of India (RBI) proposed a three-step graded approach for rolling out CBDC “with little or no disruption” to the traditional financial system.

In February, while discussing the budget for 2022, Indian finance minister Nirmala Sitharaman spoke about the launch of a digital rupee to provide a “big boost” to the digital economy. In the annual report released Friday by India’s central bank, RBI revealed exploring the pros and cons of introducing a CBDC.

In the report, RBI stressed the need for India’s CBDC to conform to India’s objectives related to “monetary policy, financial stability and efficient operations of currency and payment systems.”

Based on this need, RBI is currently examining the various design elements of a CBDC that can co-exist within the existing fiat system without causing disruptions. The Indian Finance Bill 2022, which enforced the introduction of a 30% crypto tax on unrealized gains, also provides a legal framework for the launch of a digital rupee:

“The Reserve Bank proposes to adopt a graded approach to introduction of CBDC, going step by step through stages of Proof of Concept, pilots and the launch.”

Halfway through 2022, at the proof of concept stage, RBI is in the process of verifying the feasibility and functionality of launching a CBDC.

Earlier this month, on May 17, RBI officials reportedly warned against crypto adoption citing the risks of “dollarization” of the Indian economy.

As Cointelegraph reported based on the Economic Times’ findings, key RBI officials including governor Shaktikanta Das raised concerns regarding the U.S. dollar-dominated world of cryptocurrencies. An unnamed official stated:

“Almost all cryptocurrencies are dollar-denominated and issued by foreign private entities, it may eventually lead to dollarization of a part of our economy which will be against the country’s sovereign interest.”

“It [crypto] will seriously undermine the RBI’s capacity to determine monetary policy and regulate the monetary system of the country,” they added.

Indian central bank’s ‘informal pressure’ disrupted payments: Coinbase CEO

May 11, 2022 Coin Telegraph

Coin Telegraph

"I guess we have a concern that [the Reserve Bank of India] may be actually in violation of the Supreme Court ruling," said Coinbase CEO Brian Armstrong.

Just three days after debuting in the Indian market, United States-based crypto exchange Coinbase abruptly stopped using United Payments Interface (UPI), the most popular payment service in the region. Coinbase CEO Brian Armstrong later revealed that the service disruption was due to an “informal pressure” from India’s central bank.

During Coinbase’s 2022 Quarterly Earnings call, Armstrong spoke about the company’s global expansion plans while acknowledging Coinbase’s role in starting the conversation with regulators related to crypto adoption. When asked about the impact of the recent disruption related to offering payment services in India, Armstrong stated:

“So a few days after launching, we ended up disabling UPI because of some informal pressure from the Reserve Bank of India (RBI), which is kind of the Treasury equivalent there.”

While highlighting the Supreme Court’s ruling from March 2020, which forbids RBI from banning banks to deal with crypto business, Armstrong warned about certain government entities — including the RBI — “who don't seem to be as positive on it.”

The CEO revealed Coinbase’s aggressive strategy for international expansion that involves launching services in new jurisdictions and work with the regulators based on their reactions to Coinbase’s presence in the region. Highlighting India’s attempt to impose a shadow-ban on crypto businesses, Armstrong added:

“Basically they're applying soft pressure behind the scenes to try to disable some of these payments which might be going through UPI. I guess we have a concern that they may be actually in violation of the Supreme Court ruling.”

Despite the evident regulatory hurdles, Coinbase prepares for a relaunch in the region by introducing other modes of payment as it tries to cater to the high demand of crypto investors. Armstrong concluded:

“In most places in the free world and in democracies, crypto is going to eventually be regulated and legal. And the way that we push the conversation forward is by taking action.”

On April 1, India introduced its first set of crypto laws that requires crypto investors to pay 30% tax on unrealized crypto gains. The move, however, negatively impacted the crypto ecosystem as trading volumes plummeted and in-house businesses shifted away into friendlier jurisdictions.

Eyeing on the same pool of untapped market, crypto exchange Binance launched three key educational initiatives to fast-track educating Indian investors and students about the cryptocurrency and blockchain ecosystem.

Along with the announcement, Binance highlighted that the lack of education among Indian regulators and policymakers currently hinders the widespread adoption of crypto.

Indian IT Ministry directs crypto exchanges to store user data for 5 years

May 2, 2022 Coin Telegraph

Coin Telegraph

The new directives for VPN service providers and crypto exchanges would require them to collect critical private information as well as the ownership patterns of customers.

The Indian Computer Emergency Response Team (CERT-in), which falls under the Ministry of Electronics and Information Technology, issued a new directive on Thursday, forcing crypto exchanges, virtual private network (VPN) providers and data centers to store a wide range of user data for up to five years.

Under the newly issued directive, crypto exchanges operating in India will be required to store customers’ names, ownership patterns, contact information and various other data.

Crypto exchanges and VPN services providers are also required to report any cyber incident within six hours of its occurrence and must hand over the collected data to the authorities upon order. The official directive read:

“When required by order/direction of CERT-In, for the purposes of cyber incident response, protective and preventive actions related to cyber incidents, the service provider/intermediary/data center/body corporate is mandated to take action or provide information or any such assistance to CERT-In.”

The new directives will come into force on June 22, which may force many VPN service providers and privacy-focused crypto platforms that don’t collect or store critical user data to shut their operations.

CERT-in claims the new directives are intended to help them take action against cyber crimes within six hours, however, the range of data they are asking platforms to store and hand over has raised eyebrows owing to privacy concerns among users. One user wrote:

"Our government wants to control the private life of the people and our constitution does not allow this, but to be honest no one in India is much conscious about personal data."

However, some crypto exchange owners welcomed the step, saying it will help prosecute tax evaders. Unocoin CEO Sathvik Vishwanath told Cointelegraph:

“This is a good move and helping crypto players to have clarity about the data that they would be storing. The data would help prosecute tax evaders and any crimes happening using crypto.”

At this point, it is not clear whether the new rules would be applicable to crypto exchanges' operating in India only or to foreign exchanges offering their services to Indians as well. However, looking at the earlier crypto directives, it could well be applicable to all the platforms.

The new data collection directives come at a time when the regressive crypto tax policy in the country has already led to a steep decline in trading volume and user activity on Indian crypto exchanges.

Binance to drive crypto and blockchain awareness among Indian investors

April 30, 2022 Coin Telegraph

Binance

Binance also highlighted that Indian regulators and policymakers cite the lack of education as an area of concern, hindering crypto’s widespread adoption in the region.

Crypto exchange Binance announced the parallel launch of three key educational initiatives to fast-track educating Indian investors and students about the cryptocurrency and blockchain ecosystem.

While recognizing the importance of investors’ awareness of crypto and blockchain, Binance highlighted that Indian regulators and policymakers cite the lack of education as an area of concern, which currently hinders the widespread adoption of crypto.

Primarily targeting the student demographic in India, one of the three educational initiatives launched by Binance involves the initiation of the ‘Blockchain for Good’ Ideathon, a platform for college students to come up with solutions for making crypto more accessible and inclusive.

Binance also partnered with India-based crypto influencers and educators, including Neha Nagar, Aditya Saini and Kashif Raza, to host a free webinar named Crypto for All on May 1. According to the official announcement, the crypto influencers will focus on teaching the basic concepts of blockchain and crypto while demystifying myths related to crypto trading:

“Along with providing certificates issued over blockchain by Binance NFT to all attendees, select winners will receive grand giveaways in Bitcoin and Binance Coin (BNB).”

Excited!@binance has chosen me for their mission to educate masses on crypto assets and Blockchain.

Plz register yourself for a LIVE webinar on 1st may 2022 at the link https://t.co/b1XUiAF77u

Each participant will get a free certificate on Blockchain issued by Binance. pic.twitter.com/YBYgj6bKAa
— Kashif Raza (@simplykashif) April 26, 2022

Speaking to Cointelegraph about the Indian landscape, the founder of Bitinning, Kashif Raza, revealed that “The major roadblock in the current crypto education system is that there are not enough platforms providing education in a simplified manner.” He also pointed out the need for introducing educational information in various languages to cater to the vastly diverse Indian population.

Binance’s third initiative is the newly launched Learn and Earn program that allows users to earn crypto while learning about the crypto and blockchain ecosystem. Being a long-standing crypto educator in India, Raza highlighted Binance Academy’s role in keeping up-to-date with the latest educational information.

Underscoring the untapped opportunity in educating the young crowd of India, Leon Foong, Head of APAC at Binance, stated:

“We hope to create the right incentives for users to do more thorough research and make better-informe investment decisions.”

The crypto exchange has also partnered with one of India’s top tier universities, the Indian Institute of Technology Delhi (IIT - D), as a title sponsor for its cultural fest Rendezvous to showcase use cases, including NFT tickets and certificates, fan tokens and Proof of Attendance Protocol (POAP).

On an end note, Raza recommended fellow Indians to educate themselves about the crypto ecosystem before making investments:

“Learn first and then think of earning. Web3 > crypto and one should understand the underlying tech and also try to build a career in it.”

While counter-productive on some levels, India's decision to levy heavy taxes on crypto investors has brought over certain clarity around the government’s stance on the budding ecosystem.

In early April, Coinbase Ventures, an investment arm of American crypto exchange Coinbase, conducted an in-person pitching event in Bangalore, India, with plans to plan to invest $1 million in various Indian cryptocurrency and Web3 initiatives.

In partnership with Buidlers Tribe, Coinbase CEO Brian Armstrong revealed that the venture firm intends to tap into India’s software talent and help accelerate India’s economic and financial inclusion goals. Speaking to Cointelegraph about the impact of the new tax law in attracting foreign investments, Buidlers Tribe co-founder Pareen Lathia stated:

“Tax law is just one positive step. This is a paradigm shift, and regulations will catch up.”

IMF Official: Regulating Crypto Assets Is High on the Agenda for India

April 22, 2022 Bitcoin.com

Coinbase to invest in Indian crypto and Web3 amid tax regulation clarity

April 4, 2022 Coin Telegraph

Coin Telegraph

Coinbase Ventures will conduct an in-person pitching event in Bengaluru to help accelerate India's financial inclusion goals via crypto and Web3 investments.

Coinbase Ventures, an investment arm of American crypto exchange Coinbase, shared a plan to invest $1 million in various Indian cryptocurrency and Web3 initiatives via an in-person pitching event.

In a blog post drafted while he was in India, Coinbase CEO Brian Armstrong revealed that the venture firm intends to tap into India’s software talent with the crypto and Web3 technologies and help accelerate India’s economic and financial inclusion goals.

Calling India’s cryptopreneurs!

Coinbase Ventures is partnering with @BuidlersTribe to host an in-person pitch day in Bangalore in April.

$1M+ is up for grabs, including $25k bonus grants provided by @BeliefDAO, and mentoring sessions with the best minds in crypto.
— Coinbase (@coinbase) March 21, 2022

On Apr. 8, the in-person pitch day will be hosted in Bengaluru in partnership with Buidlers Tribe, which will be further supported by Belief DAO to provide bonus grants up to $25,000. The rising interest of foreign investors in India’s crypto space can be attributed to the recent regulatory clarity brought forward by the controversial crypto tax law.

India’s crypto tax law requires — which has been effective since Apr. 1 — requires all Indian citizens to pay 30% of unrealized crypto gains as tax. Additionally, the investors will not be allowed to offset any crypto losses to compensate for the taxation.

When asked about the general notion about Web3 as a disruptor, Buidlers Tribe co-founder Pareen Lathia told Cointelegraph that Indian entrepreneurs are excited to take their firms global. Speaking about the impact of new tax law in attracting foreign investments, Lathia revealed that:

“Tax law is just one positive step. This is a paradigm shift and regulations will catch up.”

While the Indian Finance Minister Nirmala Sitharaman has previously shared her intent to rethink the crypto tax in the near future, Coinbase’s entry into the market has attracted over 110 applicants.

1. Chains ⛓️

44% projects are being built on @0xPolygon
11% projects are being built on @ethereum
11% projects are being built on @solana
5 projects are multi-chain! https://t.co/tofMDcr5pv
— Buidlers Tribe (@BuidlersTribe) March 27, 2022

According to Armstrong, Coinbase has previously invested $150 million in Indian crypto and Web3 companies and plans to onboard 1,000 employees in Coinbase’s Indian tech hub. Establishing regulations serve as a clear invitation to foreign investments, and Armstrong added:

“India is a magical place, and I believe crypto has a big future here. We’re excited to help build that future, and this event is an important step.”

Armstrong remains at the forefront of attaining regulatory clarity on cryptocurrencies in the United States. Over the past year, Coinbase overcame numerous regulatory hurdles put forth by the United States Congress and Securities and Exchange Commission. As a result, the company is expected to play a key role in regulatory discussions around crypto that will ripple across the globe.

The state government of Maharashtra in India started using Polygon blockchain technology to issue caste certificates as a part of the Digital India campaign.

The Maharashtra state government partnered with LegitDoc to roll out 65,000 caste certificates to aid the process of delivering governmental schemes and benefits.

Indian Administrative Service (IAS) officer Shubham Gupta told Cointelegraph that the Indian government is always on the lookout to implement disruptive technologies that can help democratize citizen services:

“Web3 takes the concept of democratization to a whole new level, whereby, data/information can not only made openly sharable but can be made openly unfalsifiable.”

Indian state gov’t uses Polygon to issue verifiable caste certificates

March 29, 2022 Coin Telegraph

Certificates

In partnership with LegitDoc, the Maharashtra government is in the process of rolling out 65,000 caste certificates to aid the process of delivering governmental schemes and benefits.

The Government of Maharashtra, one of India's state governments, has started issuing caste certificates over the Polygon blockchain to citizens residing in Etapalli village, Gadchiroli district, as a part of the Digital India campaign.

In partnership with LegitDoc, a blockchain-based application, the Maharashtra state government is in the process of rolling out 65,000 caste certificates to aid the process of delivering governmental schemes and benefits.

As cited by Indian Administrative Service (IAS) officer Shubham Gupta in an article co-authored by LegitDoc CEO Neil Martis, the caste certificate issuance via neutral web3 platforms aims to target 1.1 million economically challenged residents of the Gadchiroli district, with over 70% representing the tribal population.

*Caste certificate sample. Source: LegitDoc*

Furthermore, the verifiable certificates aim to deter forgery efforts by bad actors to falsely claim government-provided benefits for the under privileged. The duo also spoke about the importance of Web3 protocols in protecting the general public against deplatformation — both financially and non-financially:

“In Web3, anyone can be part of the public blockchain network, but no single entity can control the network, thereby reducing the deplatformation risk by both internal and external actors.”

*Caste certificate verification portal. Source: LegitDoc*

As a part of the initiative, the LegitDoc platform fetches selective data from the government-run MahaOnline portal and uploads it to the Polygon proof-of-stake (PoS) blockchain. The system then generates a QR code and certificates, which can be verifiable by various government departments.

For the first time in 65000 caste certificates have been issued on @0xPolygon network by the Maharashrta government.

A big thank you to @MartisNeil founder @LegitDocIndia for convincing and executing the project.

Thank you to our Young dynamic IAS officer @ShubhamGupta_11 pic.twitter.com/t00BZgWlrD
— Kashif Raza (@simplykashif) March 28, 2022

The Maharashtra government has previously implemented an Ethereum-based credentialing system to provide tamper-proof diploma certificates as a measure to avert document forgery.

Earlier this quarter, Indian finserv giant Axis Bank made use of a government-backed blockchain platform to issue a financial contract between two domestic businesses.

As Cointelegraph reported, Secured Logistics Document Exchange (SLDE) was developed by India’s Ministry of Commerce and Industry to serve as a digital document exchange platform that uses blockchain-based security protocols for data security and authentication.

The SLDE blockchain platform was used to a letter of credit, which guarantees payment upon conditions, between ArcelorMittal Nippon Steel India and Lalit Pipes & Pipes Ltd. Axis Bank president of wholesale banking products Vivek Gupta added:

“This transaction reinforces Axis’ commitment to lead the digitization in Transaction banking space.”

Five key takeaways from the official Indian crypto ads guideline

February 23, 2022 Coin Telegraph

The new guidelines regulate the size and language of disclaimers while prohibiting portraying the market as a ‘get rich quick scheme.’

The Advertising Stands Council of India (ASCI) released a set of 12 guidelines for promotions and advertisement of virtual digital assets (VDA), including cryptocurrencies, on Wednesday.

The chief advertising watchdog has developed the new guideline after extensive consultation with the stakeholders of the crypto ecosystem as well as the government, ASCI said. The advertising guidelines also mark the first legal framework related to the digital asset market in the country at a time when the government is yet to finalize the crypto bill.

The new crypto advertising framework is set to come into effect starting April 1, the same date when the infamous 30% tax on crypto is set to come into effect. Let us look at five key takeaways from the guidelines that would detainment to the future of content in advertisements of the crypto firms.

All crypto advertisements post-April 22 must add a disclaimer to explain crypto and NFT products are unregulated and "can be highly risky." The disclaimer must be shown in all dominant languages.
It is not allowed to compare a crypto asset to the regulated assets in the ad.
Crypto ads must refrain from using "currency," "securities," "custodian," and "depositories" while referring to their products or services.
Crypto advertisements shouldn't portray their products as a solution to money problems in any way or form.
Crypto advertisements talking about profitability must contain clear, accurate, sufficient and updated information.

The advertising council also specified print size for disclaimers and how it should be broadcasted via different social mediums. Siddharth Sogani, CEO of blockchain analytical firm Crebaco told Cointelegraph:

“This is a great move by the concerned regulators and it is always good to have disclaimers that offer better insight into the market rather than being propagated as “get rich quick scheme”.

Sogani went on to add that the new crypto advertisement guidelines also hint at better crypto frameworks in the future and show that the government is taking in the viewpoint of stakeholders to regulate better.

Aggressive crypto advertisements were the theme of Indian media for the majority of the last two quarters of 2021, owing to the bull market and Indian crypto exchanges seeing a great influx of new users. This led to the Delhi high court notifying government to formulate appropriate guidelines and disclaimers in July last year.

India’s finance minister waiting for consultations to decide whether to ban or regulate crypto

February 11, 2022 Coin Telegraph

Ban

The country's finance minister admitted to not having enough information to make a fateful call.

Yet another statement by a top Indian official suggests that regulatory uncertainty around the status of digital assets in the country will persist in the near term.

Responding to the general discussion of the 2022–23 Union Budget at Rajya Sabha, the upper chamber of India’s bicameral parliament, finance minister Nirmala Sitharaman stated that she was not going to “legalize or ban” cryptocurrency at this moment. The minister added that “Banning or not banning will come subsequently,” when the ministry reviews input from consultations.

Sitharaman also mentioned that the state has “the sovereign right to tax” income that citizens derive from cryptocurrency transactions. Furthermore, the government’s capacity to levy crypto taxes is separate from the issue of legally recognizing the asset class. This argument echoes the statement made earlier in the week by the head of India’s tax authority, who maintained that the plan to tax digital assets does not necessarily mean the legalization of trading.

India has recently become a hotbed for major regulatory news, with rumors of a potential ban stirring up the global crypto space in late 2021. At this point, it appears that the immediate threat has blown over, with the bill containing the ban proposition left out of the parliament’s agenda for the current session. While continuing to weigh its options on crypto assets, the Indian government has been making strides towards introducing a central bank digital currency, or CBDC, later in 2022 or in 2023.

indian crypto