Indian govt shows crypto regulatory efforts: Finance Ministry Update
CoinDcx CEO says Indian government agencies are trying to adopt a collaborative approach to regulate the crypto sector, while other countries are showing a diverse approach.
CoinDCX is a popular Indian cryptocurrency exchange. In 2018, this platform was co-founded by Sumit Gupta and Neeraj Khandelwal in 2018. Sumit Gupta is the CEO of this exchange.
On 4 Dec 2023, Sumit Gupta shared a newly issued response document by the Indian finance ministry.
By considering the published documents, Sumit noted that the Finance Ministry is engaged in the crypto regulatory works seriously, to bring clarity to the companies which are doing business in Crypto.
CoinDcx CEO noted that the finance ministry is trying to follow the international regulatory framework to regulate this sector to fight against the misuse of the decentralized nature of the crypto networks but foreign regulators are not following this approach.
According to Sumit, the government of India is planning to regulate the crypto sector under the Prevention of Money Laundering Act, providing clarity and emphasizing the commitment to curb potential criminal misuse.
Many Indian crypto influencers reacted to this development and called this a bullish move for this innovative sector in the jurisdiction of India.
In the present time, all the crypto companies are providing crypto services under traditional financial rules.
Indian crypto platforms are paying 18% GST (tax) from the trading fee commission, collected by the customers, to the government, while Crypto traders are paying 1% TDS against every crypto trade as well as 30% tax against every profit generated on the crypto transaction.
Because of the 1% TDS on the Indian crypto exchanges, the majority of the crypto traders are trying to trade the crypto assets on decentralized crypto wallets like Atomic Wallet, Trust Wallet, and MetaMask.
This rule was imposed by the Indian finance ministry in Jan 2022 and after that revenue & trading volume on all the Indian crypto exchanges crashed badly.
From time to time many Indian crypto proponents & entrepreneurs urged the government agencies to review this 1% TDS system and reduce it to 0.1% or 0.01% but no response came from any regulatory body.
Read also: Brazilian bank Itau launches Bitcoin trade services
