Recent negotiations in India on Bitcoin regulation

On September 11, 2018, the last negotiations between the crypto banks and the Reserve Bank of India (RBI) begin in India. The end of the negotiations will bring more security to Indian investors – for better or for worse. The arguments at a glance.

In India, the regulatory loop for crypto enthusiasts, traders and exchanges had become increasingly tight. At the beginning of the year, Indian Finance Minister Arun Jaitley told the Indian parliament that he did not recognize Bitcoin as a currency. Some time later, Indian tax authorities sent questionnaires to cryptocurrency investors – it should come to tax back payments . As part of this, the government formed a committee to discuss possible regulations for handling Bitcoin and other cryptocurrencies. Since cryptocurrencies are still not accepted as a means of payment, companies have begun to exploit a loophole. So they switched the stock exchange Unocoin between themselves and the customers, who around theExchange of crypto in Fiat took care of.

But the Indian Financial Supervision also closed this loophole – so the RBI had instructed the exchanges in April to close all crypto businesses within three months. After the cut-off date of July 6th, the Indian Bitcoin community had suffered severely. Thus, the number of transactions fell sharply. However, the stock exchanges decided to go to court as part of these regulatory restrictions.

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Now, representatives of the government, the central bank and stock exchanges face each other in court. The reasoning should come as little surprise. So it is the central bank, above all, the protection against investors leads. Here you want to protect against fraud and money laundering. Another problem is the lack of internal – cryptocurrencies are not secured by assets. Similar arguments come from the government officials – here one goes so far as to call Bitcoin a Ponzi scheme.

On the other hand, the stock markets rely above all on the Indian constitution. Thus, Article 19 states that all citizens should be allowed to practice any kind of occupation, trade or business. They also refer to Article 14, which prohibits discrimination and requires equal protection under the law for all.

The exchanges also say that they have largely adhered to anti-money laundering guidelines that help regulators to follow the path of money. Now, however, much of the trade has shifted to cash transactions, which can lead to illegal activity, a finding that has even been recently recognized by RBI.

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