RBI May Explore Cryptocurrency Operations: What Experts Seek From Budget

Budget 2021: The Reserve Bank of India (RBI) recently released a booklet on payment systems that covers the journey of payment and settlement systems in the country from the beginning of 2010 till the end of 2020. Private digital currencies or virtual currencies or cryptocurrencies have gained popularity in recent years. The government has been skeptical about the currencies and apprehensive about the associated risks. However, the RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency. The central bank is also exploring ways to operationalise it, in case there is a need for the same. From the upcoming Budget 2021, crypto experts seek amendments in income tax and GST laws in order to accommodate crypto trading. (Also Read: Budget 2021: Amend Income Tax, GST Laws To Accommodate Crypto Trading, Say Experts )

Here's what experts and analysts in the field expect for cryptocurrency from Budget 2021: 

Monark Modi, Founder and CEO of Bitex:

''India has seen phenomenal growth in cryptocurrency trading volumes as well as the size of the community participating in this alternate investment class. But due to lack of clarity and in the absence of regulation, banks are still hesitant in providing services to exchanges and have been blocking transactions related to cryptocurrencies, which is impacting investors.''

''Also, due to growing investment in cryptocurrency, there are many questions being raised on how such transactions and trades are being reported within the country. The crypto industry is volatile and a mark to market approach is usually used for capital gains. Taxation on realization helps in defining a lock-in effect and this interests the investors more to retain their assets when the economy benefits from a difference in investment.''

''Another aspect that requires government's approval is crypto mining, since presently, exchanges have to depend on the import of cryptocurrency by remitting funds. It is quintessential that the government considers practices in the upcoming budget that protect the interest of Indian cryptocurrency exchanges and help funds remain within the country.”

Mr. Rahul Pagidipati, CEO, ZebPay:

“Crypto assets, properly regulated, can bring tremendous economic benefit. The government's twin goals of promoting prosperity and protecting people from fraud and harm are our goals, too. That's why we have world-class security, KYC, and AML policies. We hope 2021 will bring healthy regulations for crypto investors, so they can know how to pay taxes correctly and access all the potential of this revolutionary new asset class.”