crypto strategy

Cryptocurrencies: RBI’s jurisdictional conundrum

Even the lobby that challenged the RBI in the Supreme Court, the Internet and Mobile Association of India (IAMAI), avoided dealing with crypto firms and disbanded its Blockchain and Crypto Assets Council in July 2022. But the RBI still bears the burden of the 2020 judgment even if it may take further action against the crypto in light of new developments.

What exactly did SC Rule do in RBI Vs IAMAI?

For the uninitiated and even disputed jurists, the Supreme Court has not ruled that crypto businesses should be allowed in India. The Supreme Court simply quashed an April 6, 2018 circular issued by the RBI that prohibited RBI-regulated entities from dealing with any person, firm or individual dealing in cryptocurrencies. Indeed, the Supreme Court rendered this particular circular ineffective.

Does this mean that the RBI cannot issue the same type of circular in the future? The SC judgment makes no remarks about any future RBI course of action. This means that Shaktikanta Das has more power over crypto businesses in India than he wielded.

Govt – India’s largest unspoken crypto champion

Perversely, the 30% tax on income from crypto and related assets like NFTs, etc. recognized crypto businesses. The government seems to view crypto transactions the same as drinking alcohol. It is considered bad for consumers, but it is good for businesses and tax revenues.

The government’s equivocal stance on crypto has the Law Enforcement Branch handling multiple cases of money laundering and incitement to suicide on one side, and the Income Tax Department on the ‘other.

The government, which regulates all sorts of digital activities including WhatsApp transfers and Twitter posts, is silent on the issue of crypto in India.

With 30% taxation, the government hopes to collect revenue from Indians, who already lost money in the 2022 global crypto bubble burst.

However, the legislator fails to realize that probably many times the amount of anticipated tax revenue was lost due to money laundering via crypto exchanges.


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