Market players in the digital currency industry of India have continued to express their desire for regulatory clarity. According to Ashish Singhal, the CEO of CoinSwitch, proper regulations for digital currencies are the only way to protect consumers and boost the sector.
The digital currency exchange chief executive made the statement while attending the World Economic Forum Annual Meeting 2022 in Davos, Switzerland. He told Reuters that regulation of the digital currency market in India would also remove the uncertainty hanging over market participants at present.
“Users don’t know what will happen with their holdings – is [the] government going to ban, not ban, how is it going to be regulated?… Regulations will bring peace… more certainty,” he said.
CoinSwitch boasts of being the largest digital currency exchange in the South Asian country, with a valuation of over $1.9 billion and more than 18 million users. Singhal noted that the exchange is pushing to get regulatory clarity for the market as an industry leader.
The company’s efforts have been focused on getting regulations that will establish norms for identity verification and transferring digital assets. CoinSwitch is also lobbying for mechanisms that allow exchanges to track transactions and report to authorities, Singhal revealed.
India and digital currency market uncertainty
So far in India, digital currency regulations have been slow in coming. This is despite directives being given by various regulators that have been affecting the market negatively. One such regulatory action was from the National Payments Council of India (NPCI), India’s state-run payment services provider.
Coinbase (NASDAQ: COIN), which launched in India last April, rolled out its service that allowed investors to connect with the platform via the NPCI’s Unified Payments Interface. The service, however, had to be withdrawn after the NCPI stated that it was not aware of any exchange using the UPI system.
CoinSwitch and other Indian digital currency exchanges have also had to discontinue support for payments through the UPI system. Similarly, adding pressure on the industry is the recent 30% capital gains tax India imposed on digital currencies in April.
While the government is now mulling over introducing another 28% Goods and Service Tax (GST) tax on digital currency transactions, some analysts have noted that the industry risks dying a slow death if regulations are not made clear.
According to Coinbase’s CEO, Brian Armstrong, despite the Supreme Court ruling that digital currencies are not banned, government agencies continue to apply “informal pressure” to shadow ban the industry.
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