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India is trying to cause a paradigm shift in crypto


There are several news items coming from India in recent days. This despite India still, in my opinion, should be considered a very crypto-hostile country. Just because their courts overturned the crypto ban earlier, does not mean the politicians have changed their opinions on crypto.

India’s Central Bank, the Reserve Bank of India (RBI), have yesterday started the first pilot test for the digital Rupee. The test appears to be a fairly small test as it only involves nine banks.

It looks like Indians will get to keep their normal rupees even if the pilot test is successful

Nine banks, viz., State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank, and HSBC have been identified for participation in the pilot.

One of the goals of the digital Rupee is to reduce the transaction cost. The next step of the pilot is to include small closed groups of both merchants and customers. They have said before that they are only looking to use the digital Rupee in special cases. Meaning I do not think we will see a country-wide roll out even if these initial pilot tests result in a positive outcome.

India’s Central Board of Indirect Taxes and Customs (CBIC) have asked the major Indian crypto exchanges to provide them with data pertaining to the crypto being traded on their platforms. One of the reasons behind this is for the CBIC to try and figure if the goods and services tax (GST) can be applied to these type of transactions.

The CBIC is also said to be looking into defining and classifying these crypto assets. I assume in an effort to better be able to tax them in accordance with what asset type they would belong to.

Currently, an 18% GST is levied on services provided by crypto exchanges. The Indian government began taxing cryptocurrency income at 30% in April and a 1% tax deducted at source (TDS) for crypto transactions went into effect in July.

I guess that means that they see the need to refine their current taxes that are being applied to crypto and crypto-related services. India’s finance Minister Nirmala Sitharaman has also said that he is planning to bring up the topic of crypto regulations during its G20 Presidency. The goal here is to try and get a technology-driven regulatory framework. Or, I assume, at least start the work on one.

I think it will be interesting g to see what comes out of both the digital Rupee pilot test and the G20 summit. The pilot test because I have not heard another country say they are only looking at a CBDC in a limited way. So it will be interesting to follow and see the result of the tests and how they proceed.

In a similar fashion, it will be interesting to see what comes out of India’s presidency in the G20. Will they be able to get a regulatory framework in place? Or are there too many wills involved? Depending on how successful they are during their presidency it might actually have more of an impact than we realize. Getting all G20 countries to agree on a regulatory framework for crypto. It might very well mean that crypto will largely never be the same if they succeed.

It will be interesting to follow what will happen in the G20 in the coming year. Mostly because among the countries there is every type, related to crypto, represented. We have countries that are at the forefront of crypto adoption like Argentina, Brazil, and Indonesia. Then we have the EU and the US as their own block. And we have China, Russia, and Saudi Arabia as a sort of block of their own. Hopefully, this means that their outlook is too far apart for them to agree on anything other than to disagree.

Red = Members, Purple = Represented by EU, Yellow = Permanently invited

India’s presidency starts December 1st and lasts a year. In case you’re wondering the countries in the G20 is as follows: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, the United Kingdom, the United States, and the European Union. I like how several of the countries in EU are listed individually and I assume under EU. =)

What are your thoughts on the crypto news coming out of India? Are you excited or perhaps weary as neither news is the type of news generally considered “good” for crypto? Please sound off in the comment section down below. If you would like to support me and the content I make, please consider following me, reading my other posts, or why not do both instead.

See you on the interwebs!

Picture provided by: https://pixabay.com/

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