Former RBI Regulatory Chief Advocates for Crypto Regulations in India

India’s relationship with cryptocurrencies has continued to be murky at best. The situation is made markedly worse by regulators, who have made a habit of being coy on the subject.

However, one former policymaker has called on the Reserve Bank of India to adopt crypto and go deeper into the digital currency age.

Building the Right Environment for Assets to Thrive

Earlier this week, Rama Subramaniam Gandhi, a former governor at the Reserve Bank, spoke at the inaugural Hodl 2021 virtual conference. Gandhi had tried to push the agency into adopting cryptocurrencies and creating an enabling environment for the assets to thrive in India to no avail.

The inaugural Hodl event, which was organized by the Blockchain and Crypto Assets Council of the Internet and Mobile Association of India, included several notable people across India’s crypto industry. They had reps from companies like top exchanges WazirX and CoinDCX, trading service ZebPay, and blockchain developer Polygon. While many of them gave opinions about the potential for blockchain and crypto to improve lives across India, Gandhi’s speech focused more on the regulatory angle.

Gandhi had led the Reserve Bank from 2014 to 2017. As the former policymaker pointed out, cryptocurrencies should be treated in the country as a commodity or an asset – and appropriately taxed. He added that a stable regulatory framework would make it easier for Indians to invest in and hold cryptocurrencies.

“Cryptocurrencies should be paid for through normal payment channels. If they are not, it should be deemed mined, and capital gains tax must be levied. That is like voluntary disclosure.”

Murky Crypto Stance Won’t Affect CBDC Development

India’s stance on crypto has continued to be highly controversial. The Reserve Bank banned commercial banks from transacting with crypto companies in 2018, but the decision was overturned last year following a landmark ruling from the Supreme Court.

But, regulators still weren’t done. Legislation tagged the “ Cryptocurrency and Regulation of Official Digital Currency Bill 2021” was introduced earlier this year to ban crypto, although it hasn’t been signed into law. The Economic Times reported in May that the government might consider overturning the ban to regulate digital asset trading instead. But, not much action has been made in either direction.

Despite the murky stance on crypto, India’s government remains resolute in its mission to build a central bank digital currency (CBDC). Speaking to CNBC recently, Reserve Bank governor Shaktikanta Das explained that CBDC trials could commence before the end of the year.

Das pointed out that the Reserve Bank is very careful in handling a possible digital rupee, even as several other countries worldwide progress with currency digitisation. He explained that the regulatory watchdog is more concerned with examining the CBDC’s impact on the financial sector, especially with affected monetary policy.

On the technical front, the Reserve Bank is also looking into the merits of using blockchain for the proposed CBDC. With all of this, Das expressed confidence in the Reserve Bak’s ability to get a framework ready to start tests by December.

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Author: Jimmy Aki

Indian Securities Regulator to Restrict IPO Promoters from Holding Bitcoin: Report

India’s securities regulator is reported to be working on barring all IPO organizers from holding cryptocurrencies. This is another statement move from the government following its cryptocurrency ban.

The Indian government has shown no subtlety in its approach to banning cryptocurrencies from the country.

Now, it appears to be extending its anti-crypto stance to the traditional financial industry. Initial Public Offerings (IPO) promoters would be the first to feel its wrath.

No Crypto for Fundraisers

Recently, the Economic Times reported that the Securities and Exchange Board of India (SEBI), India’s securities regulator, is planning to force all IPO participants to divest all crypto holdings before proceeding with their listings.

Per the report, crypto selloffs will most likely become a prerequisite for anyone looking to raise funds through an IPO, forming what the latest in New Delhi’s plans to eradicate digital assets is.

The news source reported that the SEBI plans to send notices to merchant banks, underwriters, securities lawyers, and all other stakeholders in India’s IPO space, warning them to stay off digital assets.

A securities lawyer told the news source that this would most likely be a government directive, as they could believe that an IPO promoter holding an illegal asset could pose a risk to investors.

Some investment bankers have also explained that the SBI might move ahead with the restriction even if the Reserve Bank’s ban on digital assets doesn’t pass parliamentary approval – an improbable process on its own.

Mahesh Singhi, an executive at investment banking firm SInghi Advisors, explained that SEBI is looking to avoid a situation where IPO promoters divers their raised funds to crypto investments, which remain highly speculative.

SEBI has yet to release any written notifications to that effect, but many stakeholders seem to believe that this restriction will come into effect soon.

No Time to Waste

The IPO restriction is the latest approach from the Indian government, which has vowed to disrupt the crypto sector in the country. First announced last month, the ban is gaining traction ahead of a presentation at the country’s lower parliament.

Titled the “Cryptocurrency and Regulation of Official Digital Currency Bill,” the proposal is already in consideration at the Rajya Sabha, India’s upper house of parliament. However, the current budget session is expected to run till April 8, with a recess session already ongoing until March 7.

Earlier this month, local news source CNBC-TV18 reported that the government might as well skip the parliamentary process altogether. Per the report, it could look to take the “ordinance route” to ban the use of private digital assets while also allowing the Reserve Bank to create a digital framework for its planned Central Bank Digital Currency (CBDC).

CNBC-TV18 reported that all appropriate parties had already begun drafting the ordinance as they look to pass the crypto ban proposal within a month. Ordinances usually allow the Indian government, through President Ram Nath Kovind, to bypass parliament and take action.

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Author: Jimmy Aki

Indian Exchange CoinDCX to Offer Pooled ETH Staking ahead of Ethereum 2.0 Launch

India’s largest crypto exchange CoinDCX announced the extension of its support for Ethereum 2.0 and its eagerly anticipated launch. The exchange has begun Ethereum (ETH) staking as it prepares for ETH 2.0 launch.

It has become one of the few exchanges globally to provide an elaborate solution to evade the logistical challenges with ETH 2.0 staking.

CoinDCX joins other top exchanges launching ETH 2.0

CoinDCX has always put its foot ahead of others regarding adopting and integrating solutions within the crypto landscape. The exchange has concluded plans to ensure the ETH 2.0 staking is offered on its platform without issues.

CoinDCX allows user funds to pool, ensuring full user participation within the network, starting with funds as low as 0.1 ETH. After the user has staked the funds on ETH 2.0, the exchange will carry the overlying infrastructure maintenance and hardware cost.

Co-founder of CoinDCX, Neeraj Khandelwal, commented on the new staking by stating that many observers and industry stakeholders have touted ETH 2.0 as Web3, the decentralized version of the internet.

The launch of the platform can allow more ETH network scalability as it will drastically reduce energy consumption.

In preparation for the release, Neeraj said CoinDCX aims to become one of the few global crypto exchanges that will launch the offering for global users.

CoinDCX ETH2 staking is coming immediately after the Ethereum Foundation stated that it had released the deposit contract for ETH 2.0 on November 4. It allows prospective stakers to deposit 32 ETH to the contract in readiness for the launch.

Launch of ETH2 staking in two phases

CoinDCX said the project is split into two phases. The first phase is to make sure ETH staking is hassle-free, which has been achieved. In the second phase of the product launch, CoinDCX said it is bringing a unique engineered solution to provide more liquidity to funds locked. The phase is currently undergoing testing, and the exchange says it hoped to complete the testing phase before ETH 2.0 goes live next month.

Validators who want to stake ETH 2.0 effectively would need to provide 32 ETH to reach the 524,188 targets or its dollar equivalent of $200 million.

Interestingly, about $1 million worth of ETH was staked less than an hour after the announcement. A few days later, the staking funds have grown to $26.9 million (57,600 ETH).

The Chief executive officer and co-founder of CoinCDX, Sumit Gupta, revealed that the development should not surprise anyone since the exchange is known for championing innovations within the cryptocurrency community.

“We are contributing to the Ethereum ecosystem, so it helps to grow the whole ecosystem,” he reiterated. He further stated that the exchange is providing full support for users who are looking to stake Ethereum.

Earlier this year, CoinDCX rolled out it’s first offering with three major coins Tron (TRX), QTurn (QTUM), and Harmony (ONE).

The exchange allowed staking to all users holding minimum balances on the above tokens. Also, the exchange later started offering additional tokens on its platform, including XTZ, NEO, and EOS)

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Author: Ali Raza

Cashaa’s New Joint Venture, UNICAS, to Roll Out 22 Physical Crypto Banks in India

U.K. based cryptocurrency firm, Cashaa partners with India’s banking service provider, United Multistate Credit Cooperative Society, as the latter, introduces banking transactions using cryptocurrencies to 22 physical locations in northern India. According to a blog post on Medium, the two financial firms will operate under a joint venture, UNICAS, to launch the products in December this year.

The UNICAS venture will allow users to invest in cryptocurrency, real estate, gold, and other physical assets directly, buy crypto using cash at any of the 22 physical locations, and take up loans against their digital assets. Cashaa plans to open over 100 physical locations across India in 2021, currently stationed across three states – Delhi, Rajasthan, and Gujarat, with a combined population of over 140 million.

The Indian based bank will provide the physical locations and licenses necessary to operate in the country while Cashaa joins in with experience in the crypto space. Mr. Dinesh Kukreja, Managing Director of United Multistate Credit Co. Operative Society, will lead UNICAS as the joint venture’s chief executive.

“We are the first regulated financial institution in the world with physical branches where users can access crypto products,” Kukreja, CEO, UNICAS.

Kukreja stated the project would allow the company to “scale and offer customized financial and crypto products for the local Indian markets.” The banking location will be reconstructed as crypto launches, allowing crypto transactions using the rupee and asking for loans using your crypto assets.

At launch, the banks will allow transactions, buying, and selling of six cryptocurrencies, including – Bitcoin (BTC), Cashaa (CAS), Ethereum (ETH), Binance (BNB), Bitcoin Cash (BCH), EOS, Litecoin (LTC), and Ripple (XRP).

However, there still is the dark cloud of regulation from the Indian government following the Supreme Court’s ruling – overturning the blanket ban of cryptocurrencies imposed by the Royal Bank of India (RBI). Kumar Gaurav, Founder & CEO of Cashaa, said the confused nature of the government could be the reason “most Indians are not aware or are miss guided about cryptocurrency as an online product.”

“They tend to trust what they see or what the government recognizes and recommends,” he continued. “Also, India is still largely a cash-based economy despite a Demonetization drive. With UNICAS Crypto lounges we intend to address both issues which are slowing the process of cryptocurrency adoption in India.”

The joint venture aims at rapidly expanding its reach across India – targeting over 100 branches serving cryptocurrency customers in 2021. With the traditional finance world merging with the innovative crypto industry, Kukreja aims the partnership will “bring enormous transformation to both Indian fintech and the crypto industry.”

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Author: Lujan Odera

India’s Tech Giant, TSC, to Launch ‘Quartz’ Crypto Trading Solution For Institutions

Tata Consultancy Services (TCS), a subsidiary of India’s largest tech firm, Tata, announced the launch of a crypto solution enabling traditional financial institutions to offer digital asset services to customers.

According to a spokesperson at the firm, the new solution, dubbed “Quartz Smart Solution for Crypto Services,” will offer the best security services and compliance structure to allow seamless cryptocurrency trading. According to a press release on TCS official blog, the Quartz solution is explained as

“a next-generation, digitally-powered offering for banks and investment firms to provide secure and seamless cryptocurrency trading to their clientele.”

The solution offers an array of features to financial institutions and banks, including support for multiple cryptos, a link to fiat currency exchange, and a digital asset transfer platform.

The project is the brainchild of Quartz, a startup incubated by TSC, which builds decentralized ledger solutions to traditional finance problems. The smart solution aims at providing the “best-in-class hardware security module” to beef up security and verification of transactions.

The platform integrates multi-signature feature wallets and provides the infrastructure to build secure OTC exchange desks. Finally, a close audit and blockchain forensic checks ensure that transactions made on the Smart Solution for the Crypto platform are appropriately verified and authenticated.

Crypto is spreading into the traditional finance world with hedge funds and investment institutions taking the risk and placing big bets in the industry. R Vivekanand, Global Head, Quartz, TCS concurs on this analogy stating his company is ready to take on the challenge of providing these services.

“We are excited to offer them our robust, secure, and scalable solution for trading, storing, and transfer of these assets,” Vivekanand said.

“We believe Quartz is well ahead of the curve in providing such a solution that allows customers to transact in multiple cryptocurrencies and digital assets, backed by best-in-class security features.”

India is taking a step forward in blockchain, and the Supreme Court lifted digital asset development after the recent blanket ban on crypto by the Royal Bank of India (RBI).

Throughout 2019, TCS announced a number of development strategies and projects in the blockchain arena, including Quartz integration of RippleNET allowing banks and financial institutions to transfer funds freely; and the security settlement platform to enable cross border transfers.

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Author: Lujan Odera

Indian Securities Regulator Urges the Exploration of Blockchain for the Securities Market

Ajay Tyagi, the Security and Exchange Board of India’s (SEBI) chairman, considers blockchain technology for use of securities that needs to be considered as it has great potential.

SEBI regulates the securities market in India. On January 23, at a research conference arranged by the National Institute of Securities Market, Mr.Tyagi believes AI, machine learning and blockchain tech have great potential for securities. These were his exact words regarding the blockchain technology:

“Blockchain could be used in clearing, settlement and record-keeping given its benefits in maintaining records in distributed ledgers, while still being a single source of truth.”

International Blockchain Projects Given as an Example

Tyagi also talked about some international blockchain projects that research the securities market, giving them as an example. He said:

“Blockchain-based solutions are being developed by some foreign exchanges for settlement and by domestic exchanges for KYC recordkeeping purposes. There is a need for active research into these technologies to explore their best possible usage in securities markets.”

Technology Plays an Important Role on the Capital Markets

Tyagi emphasized how important the latest technologies are for the capital markets, by saying:

“Catching malpractices in the market using the standard tools is increasingly getting difficult. SEBI has already planned Data Lake project to augment analytical capability with advance analytical tools viz., AI/ML, deep learning, big data analytics, and natural language processing, etc.”

While the government in India is encouraged by blockchain tech being used in many cases, its stance on cryptocurrency is more on the negative side. As previously mentioned, India’s Supreme Court is now in the process of solving a petition that was filed against a ban imposed by the Reserve Bank of India (RBI) on the banking channel. January 28 is the date for the next hearing in this case.

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Author: Oana Ularu

RBI Crypto Ban Hearing in India Postponed by the Supreme Court, Is This Good or Bad?

The Indian Supreme Court has postponed the hearing on Reserve Bank of India’s (RBI) case related to crypto businesses.

Ever since the RBI implemented its ban on crypto dealings at banks in April 2018, crypto firms and exchanges in India have had a very tough time. Many petitions, both public and industry-related, have been signed. More than this, the decision has been taken to courts and called unconstitutional. The Internet & Mobile Association of India (IAMAI) is the non-profit body that appeals to the government when it comes to such matters, and the one that brought the case to court.

The Court’s Action Regarded as Positive

Kashif Raza, the co-founder of India-based analysis and regulatory news platform Crypto Kanoon, says the case’s principal contention is to appeal the ban on the grounds of being unconstitutional. He also commented that the latest action taken by the court is very positive, these being his own words:

“Today RBI was supposed to reply to the representation filed by IAMAI […] It seems that the Supreme Court of India today passed over the matter primarily because the court expects there to be longer arguments in this case, which could take their entire week. They gave it a pass so as to allow in future for a full-fledged hearing of the arguments, to listen to both parties. So interesting times ahead.”

The Indian Crypto Climate is Adverse

The ban had brought quite the extensive toll for the Indian crypto industry, with exchanges like WazirX being forced to go P2P so that in-house crypto to fiat conversions are avoided, and Coindelta terminating is services altogether. Uncertainty seems to be the word of the moment, as in the fall of 2019, the Indian government had delayed introducing a contentious draft bill on crypto banning. The bill dubbed “Banning of Cryptocurrency and Regulation of Official Digital Currencies” doesn’t only intend to ban using crypto in India, but also to make things easier for RBI to launch the Digital Rupee.

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Author: Oana Ularu

Binance Buyout Brings Hope to Investors in India of Enhanced Regulation

Back in April 2018, India’s central bank instigated a massive crackdown on purchasing and trading cryptocurrency like Bitcoin. Bibhu Kanungo, who is the Deputy Governor for Reserve Bank of India, declared that all the firms regulated by the RBI should “stop having business relationships with entities dealing with virtual currencies forthwith and unwind the existing relationships in three months time.”

Crypto exchanges were therefore shut down as a result of regulatory pressure. But in not more than 18 months, Binance decided to purchase WazirX. It is the most influential crypto exchange in India.

Regulatory Qualm

Even before implementing the ban, the bank had already issued statements whereby it warned users of perils associated with digital currencies. In 2017, India’s finance ministry announced that cryptocurrency was a significant threat, and it was kind of an investment bubble. If it crashed in any way, whether prolonged or sudden death, it would significantly affect investors.

Things got even worse after the bank failed to assess the issues surrounding cryptocurrency and imposed a ban on all cryptocurrency activities. The bank ought to have formed new regulations to govern the crypto activities and shield consumers from malicious companies and organizations.

The ban led to the creation of a bill commonly referred to as “Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019.” Lawmakers proposed a jail term for not less than ten years to the citizens who engaged in cryptocurrencies.

The bill, however, suggested that India Reserve Bank’s Digital Rupee could be approved as a legal tender by the government. But all other currencies that are otherwise cryptocurrency would be prohibited. The CEO Crebaco, Sidharth Sogani, explained meticulously why the government of India took this stun action saying that there is no way you can regulate something that you are not in direct control of. He described Bitcoin as an open-source network and borderless hence cannot be controlled.

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Author: Daniel W