India: Delay in crypto-bill expected, but why are DeFi, NFT players worried
The Indian government was expected to table the anticipated crypto-bill in the ongoing Winter session of the Parliament. However, according to reports emerging at press time, that may not be the case anymore.
Changes expected in the #CryptoBill
The New Crypto Bill might not be tabled in this session of Parliament
— Sonal MehrotraKapoor (@Sonal_MK) December 15, 2021
In 2022, five Indian states are heading for Assembly elections and sources claim that the government does not want to “rush” the crypto-bill. It is speculated that the administration will work on a crypto-ordinance after the state elections, one that will be in line with the “global framework.”
Having said that, DeFi and NFT players have reportedly reached out to the government with fresh regulatory concerns. While they seek clarity on proposed regulations, they fear being clubbed with other cryptocurrencies.
Toshendra Sharma, Founder and CEO of NFTically told ET,
“DeFi in India is still at an early stage. Since DeFi mostly revolves around cryptocurrencies and staking, it will be massively affected if the crypto transactions are considered illegal in India. It will depend on how the government defines the crypto transactions and how they set up a system to track them.”
Unlike many crypto-exchanges in India, only a few offer DeFi services that include crypto-deposits, insurance, and loans on a fintech platform.
In fact, a local report suggested that some are tied up with small banking businesses and cooperative societies and aim to open ATMs.
Kumar Gaurav, Founder and chief executive of Cashaa, told ET,
“We are in touch with the finance ministry and state registrars to understand which path has been taken and so far, it seems that crypto is allowed as an asset class and once it gets regulated we will add more co-operatives in our network to make it nationwide.”
Previously, the Finance Minister had cleared her position in the Parliament that there is no proposal to recognize Bitcoin as a currency. This has, however, gotten NFT (non-fungible token) platforms worried. Reports claim that NFT firms are arguing against being clubbed under commodities like other cryptocurrencies.
Kumar further claimed that the industry wants the government to define crypto to positively impact its adoption. he added,
“…more and more people declare it so that they can use it to take loans or deposit it to earn interest rates.”
Meanwhile, opposition in the country has also been asking the government to clarify its position on crypto. Especially after PM Modi’s Twitter handle was briefly compromised and a crypto tweet started making the rounds.