Securities and Exchange Board of India (SEBI) chairman Ajay Tyagi announced recently that a policy on the cryptocurrency should be released first before the rule of SEBI is outlined. As the bitcoin prices continue being volatile and the investors’ safety becomes a major concern, regulation on the digital currencies in India is put on hold until all the policies are implemented.
Tyagi said that they have requested the relevant regulators including the Department of Economic Affairs to call for a committee to develop a policy that will guide SEBI to fully contribute to the regulation of the virtual currencies. According to Tyagi, the policy is critical to governing the currencies that are not yet a legal tender.
The cryptocurrencies such as bitcoin are generally stored in an electronic or digital format, hence they are vulnerable to hacking and malware attacks, which result to loss of money for investors. Therefore, a policy should be framed to guide the regulation of the industry and safeguard the assets of the investors.
In 2017, bitcoin prices increased drastically from $1,000 to more than $14, 000 per bitcoin that pushed many bitcoin investors to sell or buy assets. However, as the tax season approaches, it’s not clear how the government of India would impose taxes on the virtual currencies.
Regulators in developing countries across the world have continuously expressed concern over the trade of the cryptocurrencies such as bitcoin. However, the virtual currency has remained unabated, attracting millions of investors, thus putting pressure on the cryptocurrency exchanges to meet the increasing demand.
Since 2013, the Reserve Bank of India (RBI) has repeatedly restated its concern over the virtual currencies but is yet to come up with any concrete solution. Unlike other countries that have banned or severely restricted the transaction of cryptocurrencies, India has progressed slowly allowing the technology to take its course at its own pace. This has enabled the emergence of the vibrant industry in India focusing on the blockchain technology, which motivates the growth of the cryptocurrencies.