Cryptocurrencies has made millionaires, even billionaires of the people who invested in in its early years, but the economy regulatory bodies of India are still wary.
Techies, fintech experts, even the common man with an investment in this volatile offering looks to the Budget 2018 to give some clarity on the government’s stance on cryptocurrencies.
Cryptocurrencies has made millionaires, even billionaires of the people who invested in in its early years, but the economy regulatory bodies of India are still weary.
Here are five things the Budget might provide clarity on pressing issues:
Clarity on tax
whether a tax on transaction (similar to Securities Transaction Tax) or on returns from trading would be taxed and if so, at what rates, would help bring clarity on perhaps the hundreds of crores in Bitcoin, ethereum and other cryptocurrency held by Indian citizens and prevent the transfer of these to obscure wallets beyond Indian shores
Clarity on KYC
While Zebpay, CoinDelta, Koinex already ask for documents like PAN and Aadhar, proper KYC steps can help alleviate government concerns around money laundering and also make it easier for these platforms to set and enforce standards
Clearer directions for banks
Government directives to banks about reporting money transferred to cryptocurrency platforms, instead of totally blocking such transfers, may unearth unaccounted income and also help ease issues of legitimate investors whose investments through these crypto platforms are today in a limbo due to lack of withdrawal facilities
Directives on ICOs
Initial Coin Offerings are a rage and Indian start-ups may at some time also look to jump in and issue their own ICOs; clear regulations around this can help protect investors while also enabling legitimate start-ups to get access to funding
Exploring smart contracts in government processes
Dubai, Estonia and other countries are starting to explore using ‘smart contracts’ which are based on blockchain technologies for keeping land records, etc.; land records has been an intractable problem for a large country like India and declaration of pilot around using ‘smart contracts’ can help start more innovations around blockchain technology and also may also reduce corruption
“The Government will explore the use of blockchain technology proactively for ushering in the digital economy.”