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Addressing a virtual conference in Sydney, the Prime Minister had urged democratic nations to work as a team and ensure that cryptocurrency did not go into the wrong hands, cautioning that it can spoil the youth. He had said the digital age is changing everything as it has redefined politics, economies and societies. It has also raised new questions on sovereignty, governance, ethics, rights and security.

Trading in cryptocurrencies in India continues to hang by a strand of thread that is neither in the legal, nor the illegal territory. In a five-point framework, cryptocurrency industry body IndiaTech.org has written to the government to “define, introduce, enable, allow and encourage necessary checks and balances” for cryptocurrencies in India, according to its Twitter handle.

Key among these five points are defining cryptocurrencies as an ‘asset’ and not a currency, and therefore, enable direct and indirect taxes on these ‘assets’ to bring them at par with other financial assets that will also generate revenue for the government.

Recently, the Ministry of Corporate Affairs (MCA) had made it mandatory for companies to report their crypto holdings, but no such mandate has yet been implemented for individuals as well as homegrown crypto exchanges.

Crypto players remain optimistic

“The Ministry of Corporate Affairs (MCA) has recently made it mandatory for companies to report crypto-related transactions. We believe this directive is a step in the right direction and hope it will be followed by broader regulations around crypto. This is the first time the government has formally recognised crypto as an asset class. That simple recognition should help fight the misinformation that crypto is not legal,” Avinash Shekhar, Co-CEO of ZebPay told Money9.

While disclosure by companies is one thing, putting cryptocurrencies under the tax structure is quite another. Industry players, however, continue to be optimistic about the evolving crypto-specific regulatory landscape in India.

“As an industry player, we welcome this progressive step. It is great to see that this has recognized companies’ investment in crypto as a legitimate asset class. We expect more companies to acquire and hold crypto-assets and diversify their portfolios. However, there is no clarification as yet whether exchanges have to disclose holdings of the customers or not. With proper directives, this move is expected to boost the institutional adoption of crypto assets in India, bring more transparency and take the industry to the next phase of growth,” Nischal Shetty, CEO, WazirX said.

(With inputs from Rajat Shubhra Mozumder)