India’s regulatory uncertainty for the crypto sector came into sharp focus at the ongoing World Economic Forum (WEF) Annual Meeting in Davos. In an interview with Reuters, CoinSwitch Kuber CEO Ashish Singhal highlighted the government’s policy dilemma on the industry.
“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?” Singhal wondered. India must bring in appropriate legislation to remove uncertainty, boost the crypto sector, and protect investors, he added.
Singhal appreciated the Indian government’s move on taxation and advertising guidelines for the crypto sector by the Advertising Standards Council of India (ASCI). However, according to the media coverage, he said more needed to be done, including enacting a set of laws.
Mechanism to track transactions and report them to authorities in case of need and norms for identity verification and transfer of crypto assets need to be established, he explained.
Coinciding with the plummeting crypto prices, the Davos meeting has seen a substantial presence of blockchain and cryptocurrency companies, the report mentioned.
The Indian government had twice announced bringing in legislation to ban cryptocurrencies last year. But it deferred the plan and instead introduced a tax on the income from such transactions. Many interpreted this “as a sign of acceptance” of digital assets. “Regulations will bring peace … more certainty,” Reuters quoted Singhal as saying.
But the regulatory and tax environment has become even tougher in recent months. While slew of new and higher taxes are being levied on crypto businesses, banking sector regulators have denied crypto exchanges access to instant inter-bank payment systems.
“We are pushing for regulations. With the right regulation, we can get the clarity,” he said.
Singhal co-founded CoinSwitch Kuber along with two others — Govind Soni and Vimal Sagar Tiwari — in 2017. In October 2021, the exchange raised $260 million at a $1.9 billion valuation.
The funding round, the largest in the Indian crypto space to date, was led by Coinbase Ventures ($150 million) and Andreessen ($80 million). Right now, CoinSwitch, with over 18 million users, claims to be the largest crypto exchange in India.