Top crypto exchanges operating in India have urged the government to form a regulatory body to oversee virtual currency transactions in the country. As per a report in the Economic Times, the industry believes that the Securities and Exchange Board of India (SEBI) or a new regulatory body, would be better suited to govern the sector rather than the Reserve Bank of India (RBI), which is currently the primary body dealing with crypto-related policy issues.
The industry claims that crypto currencies such as Bitcoin, Ethereum and Dogecoin do not fall within the convention definition of ‘money’ or currency and would rather be closer to commodities or gold trading, making it appropriate for SEBI or a new body comprising of experts from SEBI as well as RBI to regulate it.
Besides issues of who will regulate and control this nascent sector, the industry is also faced with ambiguity on the category or income head that would be applied for income tax purposes as well as Goods and Services Tax (GST) on transactions, among other legal challenges.
The crypto currency industry in India, which is said to be worth over US$15 billion is grappling with the possibility of the central government introducing a new overarching legislation to ban all private digital currencies. Consequently, companies individually and as a group have been regularly reaching out to all authorities through representations and meetings to seek regulation rather a blanket ban.
Recently, industry body IndiaTech had made similar recommendations to the central government, urging it to consider crypto currencies as an investment option rather than fiat currency and regulate it accordingly, while allowing Foreign Direct Investment (FDI) of up to 76% in the sector.
IndiaTech also recommended regulatory and technological measures to ensure transparency in the process and codes of various crypto currencies as well as amendments in the existing tax statutes to ensure that crypto currencies are taxed in a fair and rational manner.