The Confederation of Indian Industries (CII), a non-governmental trade association and advocacy group, has proposed treating cryptocurrencies as securities of a special class.
The trade association published a report titled "Cryptocurrencies, cryptographic tokens / assets and regulations: the way forward" where it advocates to regulate, not outlaw, the cryptocurrency market, reported Line of business. The report highlighted the substantial technological innovation that core blockchain technology can bring to the payments and remittances sector.
The report proposes formulating new regulations around the nascent cryptocurrency market rather than regulating them under the existing securities law.
“A new set of regulations appropriate to the context of crypto / digital currencies and their decentralized nature without jurisdiction must be developed and applied. This would mean regulatory focus mainly on transactions and custody, rather than issuance (except when issuance involves an Initial Coin Offering (ICO) to the public by an issuer established in India), ”the official report said.
The IIC report recommended including cryptocurrencies under the special provision of income tax and GST laws, by virtue of which it may be treated as an asset class for tax purposes, unless a participant specifically treats it as "shares under negotiation".
Related: Smart Encryption Policy Could Keep India's Tech Dominance Atop
The report recommended imposing strict Know Your Customer and Anti-money laundering requirements for centralized exchanges to ensure investor protection. Additionally, these exchanges must register with the Securities and Exchange Board of India (SEBI) to obtain a financial market broker license. It also recommended establishing a minimum capital and guarantee fund requirement for exchanges, while meeting investor disclosure requirements.
The IIC report comes at a crucial time, as a draft of a cryptocurrency bill is currently under discussion in parliament. India's finance minister had previously assured that the government would not adopt a ban approach and rather regulate cryptocurrencies as an asset.
Post navigation
