India cannot risk being a late mover in accepting crypto: CoinSwitch’s Ashish Singhal

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Cryptocurrencies provide India an opportunity to turn into a net exporter from a net importer of technology, according to Ashish Singhal, Founder and CEO of crypto exchange CoinSwitch Kuber.

Speaking at Mumbai Micro Experience of FinTech Festival India 2021-22, Singhal said, “We cannot be the late movers in accepting crypto. We already missed the first bus of Internet 1.0. Today 70 percent of our revenues go to US-based tech giants. We are a net importer of technology. We import over $10 billion of this technology every year and it is expected to grow to $45-30 billion over the next 3-4 years.”

Early participation in cryptocurrencies could give India the chance to become a net exporter of crypto and blockchain technology, Singhal added.

Mrutyunjay Mahapatra, Member of the Governing Council of RBI Innovation Hub and Board of Supervision of NABARD and Member of Insurance Advisory Council of India, voiced concerns that RBI has around cryptocurrencies.

“RBI’s apprehension regarding cryptocurrency is emanating because the three critical things, entry barriers, supervisory framework, and cross border aspect are not getting translated into the crypto world," Mahapatra said.

RBI Governor Shaktikanta Das has repeatedly said that the regulator has concerns around cryptocurrencies and the same has been conveyed to the Centre. Das had recently said that there was a need for deeper discussions on cryptos.

According to Mahapatra, “Systemic risk and the psychological risk of denting the political stability and social stability because of economic instability even if it is the minutest are creating concerns in the minds of the policymakers.”

Acceptance and regulation of cryptocurrencies can have a cascading effect on various facets of the economy, including banks as the meaning of investing is changing rapidly.

Speaking from a banker’s perspective, Saugata Bhattacharya - Executive Vice-President & Chief Economist at Axis Bank, said, “If an environment of cryptocurrencies including global central bank digital currencies begin to evolve then there are multiple implications for banks, some good and some bad. They need to be aware and need to design their systems in place for this technological shift.”

The past few days saw chaos in the crypto world after the Centre released a list of bills to be tabled in the Winter Session of the Parliament that is set to begin on November 29. The crypto bill, named ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ is part of the list.

Industry experts and lawyers expect that cryptocurrencies will be regulated and there will be no blanket ban. The regulations are expected to ensure better monitoring of crypto transactions and guidelines around penalties for fraudulent activities might be framed. However, clarity is awaited on how crypto assets and related services will be taxed.