CoinDCX – one of the leading cryptocurrency exchanges in India – eyes an initial public offering (IPO) in the near future. The “precise timeline” will depend on the upcoming government regulations.
Following The Steps of Coinbase
Neeraj Khandelwal – Co-Founder of CoinDCX – revealed the news in a recent interview with Bloomberg. He asserted that his company will pursue an initial public offering “as soon as” it receives the green light from the government. According to him, the initiative will strengthen the local cryptocurrency industry and bring more confidence in the markets:
“As soon as the government or the situations allow us, we will try for an IPO. An IPO gives legitimacy to the industry, just like the Coinbase IPO gave a lot of confidence in the crypto markets. Similarly, we want to install a similar level of confidence with an IPO of CoinDCX.”
Speaking of Coinbase, it is worth noting that in April, it became the first major digital asset exchange to have its shares publicly traded. The debut price of its shares started at $381, while at the moment of writing these lines, it is hovering around $300.
CoinDCX intentions come at a critical time since the future of digital assets in India seems somewhat uncertain. Last week, the government announced plans to impose a China-style ban on the industry and thus “prohibit all private cryptocurrencies in India.”
The proposed bill received severe backlash from the community as many locals favor bitcoin and the altcoins. Reuters showed that India has around 15 to 20 million cryptocurrency investors who have allocated nearly $5.4 billion of their wealth in the market. As such, many experts started doubting that the second-most populated country would implement such severe restrictions.
Avinash Shekhar – Chief Executive Officer at Zebpay – predicted that lawmakers are more likely to impose strict rules on digital assets than a total ban. According to Khandelwal, that would be the right decision. It will also indicate “acknowledgment from the government side of the growing investor base for crypto.”
Following in the Footsteps of Others
Aside from Coinbase, another cryptocurrency company that recently became public was Bakkt. ICE’s Bitcoin exchange went in another direction via a merger with a SPAC, and the total valuation was just over $2 billion.
Shortly after, the Bakkt shares skyrocketed by triple-digit percentage following impressive partnerships with Mastercard and Fiserv.
Avinash Shekhar – Chief Executive Officer of the cryptocurrency exchange Zebpay – predicted that the Indian lawmakers are more likely to impose tough rules on the digital assets than prohibit their usage.
The exec added that regulation in the sector is necessary as it could bring many innovators and multibillion-dollar companies.
The Vibes Do Not Indicate for a Total Ban
The cryptocurrency environment in India is controversial, to say the least. The authorities of the largest economy in South Asia have been changing their stance on the matter numerous times over the past few years. At some point, they even wanted to criminalize the usage of bitcoin and other digital currencies.
Earlier this week, the government once again showed its intentions to crack down on the asset class. Similar to China, India’s proposed bill aimed to ban the usage of private tokens in favor of its own state-controlled CBDC:
“The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”
According to Zebpay’s boss – Avinash Shekhar – this step is exaggerated. In a recent interview for CNBC, he said he sees “lots of positive vibes from the government,” leading to the conclusion that an outright ban is not on the agenda:
“The message which we are getting from the government is that they’re looking for some kind of regulation, strict regulation, but not a complete ban.”
Imposing a comprehensive regulatory framework in the industry could be beneficial for the country, Shekhar added. He explained that the move would attract many innovators and giant institutions, which are not ready to delve into the cryptocurrency space without rules in it:
“With regulation coming in, I think that will be a major area where I think multibillion-dollar companies will be created.”
Without Regulation, Crypto Could Land in The Wrong Hands
Narendra Modi – the Prime Minister of India – also highlighted the importance of implementing regulatory policies around the digital asset industry. He suggested that many criminals will continue using bitcoin and the altcoins in case global regulators fail to incorporate a legislative framework.
According to Modi, the process should include nations with democratic visions such as India, Australia, and others in the Indo-Pacific region and beyond. They need to establish a mutual collaboration and act together.
India is looking to ban most crypto assets when it introduces a new bill to regulate the industry this coming winter.
The agenda for the session lists “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.” The bill also addresses the framework for the official central bank digital currency that will be issued by the Reserve Bank of India.
India is now following in the footsteps of China in attempting to eradicate the use of decentralized crypto assets in favor of its own state-controlled CBDC.
“The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”
It is the second time the bill related to cryptocurrencies has been listed for introduction in parliament, but it was not introduced earlier this year.
India has a population of roughly 1.4 billion, and a large portion of them are unbanked. Consequently, crypto has become quite popular in the country in recent years, but the state clearly doesn’t approve of them.
According to Reuters, there are around 15 to 20 million crypto investors in India, with total crypto holdings of around 400 billion rupees, or around $5.4 billion, so it is clearly a huge market.
As expected, there has been a lot of backlash to the move from crypto users and politicians alike. Member of parliament Priyanka Chaturvedi called it a “recipe for disaster,” adding that it is robbing India of creating an ecosystem for new-age fintech.
If true, this is a recipe for disaster India doesn’t need. Banning ALL private crypto currencies is basically killing the space- robbing India of creating an ecosystem for new age FinTech. Anyway, expecting any better from GoI was wishful thinking. https://t.co/6hYt2I4LxT
— Priyanka Chaturvedi🇮🇳 (@priyankac19) November 23, 2021
Founder and CEO of India’s leading crypto exchange WazirX, Nischal Shetty, looked on the brighter side stating “there will be speculation on both sides,” before adding “the good thing is more people within Government are aware of how crypto works.”
Crypto Criticism From The Top
“Take crypto-currency or Bitcoin for example. It is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth.”
Meanwhile, Reserve Bank of India governor Shaktikanta Das has continued to express his worries stating, “when the central bank says that we have serious concerns from the point of view of macroeconomic and financial stability, there are far deeper issues involved,” at a recent event.
Self-proclaimed SHIB and DOGE killer Floki Inu (FLOKI) has secured a major partnership deal with one of India’s top professional football clubs, Kerala Blasters FC, popularly known as The Blasters.
Blasters’ Official Sleeve Sponsor
In an official announcement made on FLOKI’s Twitter page, the memecoin project said it will become the club’s official sleeve sponsor, effective immediately.
#FLOKI PARTNERS WITH INDIA’S BIGGEST FOOTBALL CLUB
In what is a landmark deal symbolic of $FLOKI‘s vision to truly be a dominant cryptocurrency, we would like to announce a strategic partnership with India’s biggest football club, the Kerala Blasters FC. pic.twitter.com/s1MF8ZI6CL
— Floki Inu (@RealFlokiInu) November 19, 2021
As part of the deal, Floki Inu’s logo and website will appear on the right sleeve of The Blasters’ jersey throughout the duration of the Hero Indian Super League (ISL).
Additionally, the FLOKI brand, along with other “fan-focused” promotional items, will have LEDs displayed at all of the club’s home matches.
Promoting Mainstream Adoption
FLOKI’s developers intend to tap into Kerala Blasters’ fame to push the memecoin to mainstream adoption in India and introduce its brand to more than 100 million ISL fans across the globe.
Kerala Blasters is currently the most followed club in India. It made headlines as the first Indian football club to reach two million followers on Instagram in February.
It currently boasts over 2.3 million followers on Instagram and 1.8 million followers on Twitter. FLOKI intends to leverage the club’s popularity to grow its active and loyal community of supporters.
FLOKI’s Aggressive Ads
Earlier last month, a group of yet unidentified Floki Inu enthusiasts decided to run a marketing campaign in the UK via London’s public transport system.
The FLOKI ad, which read “Missed Doge? Get Floki” was plastered on different London buses and underground stations, geared toward convincing commuters using the city’s public transport system to invest in the coin.
However, it was not too long until the UK government took notice of the “aggressive” advertising of a financial product, which it regards as being unregulated.
Government agencies, including the Advertising Standards Authority (ASA), immediately swung into action to curb the rise of “misleading” crypto ads. According to officials, these cryptocurrency ads are “unethical.”
The Transport for London (TfL), the UK government agency that manages the public transport system, was also sternly warned not to approve any such ads on London buses.
Narendra Modi – the Prime Minister of India – urged democratic countries to work together and design a comprehensive regulatory framework for cryptocurrencies.
Without it, the asset class can be employed unlawfully and can even spoil the younger generations, he added.
Regulations Are Necessary
In a recent appearance at the Sydney Dialogue, India’s leader highlighted the importance of implementing regulatory policies in the digital asset industry. He opined that the process should include nations with democratic visions such as India, Australia, and others in the Indo-Pacific region and beyond. They need to establish a mutual collaboration and act together.
Modi’s comments were mainly focused on bitcoin. He assumed that many criminals would continue using the primary cryptocurrency in their illicit activities without the necessary legislation. On top of it, the lack of rules can also “spoil our youth.”
“We are at a historic moment of choice whether all the wonderful powers of technology of our age will be instruments of cooperation or conflict,” India’s PM concluded in his speech.
The world’s second most populated nation is reportedly on its way to imposing such regulations by February 2022. The Indian government even started contemplating treating cryptocurrencies as an asset class.
This comes as a U-turn since earlier this year, the authorities planned to force a total ban on bitcoin and the altcoins. Furthermore, they wanted to pass a bill according to which cryptocurrency custody, mining, and trading would become a criminal act.
India May Launch Its CBDC Next Year
A coverage by Reuters revealed that the central bank digital currency of the Asian country might see the light of day in the first quarter of 2022. P. Vasudevan – Chief Manager at the Reserve Bank of India (RBI) – said:
“I think somewhere it was said that at least by the first quarter of next year a pilot could be launched. So we are bullish on that.”
Earlier this year, Shaktikanta Das – Governor of the RBI – raised hopes that India could begin trials for its CBDC by the end of the ongoing year.
However, Vasudevan said that designing such a financial product is not an easy task, and there should be no hurry to launch it:
“We are on the job, and we are looking into the various issues and nuances related to CBDC. It’s not a simple thing to just say that CBDC can be a habit from tomorrow on.”
Featured Image Courtesy of PMIndia
The last couple of years have witnessed explosive growth in the mainstream acceptance of cryptocurrencies as aggregate global digital asset capitalization surged past $3 trillion in market capitalization amid a flood of institutional demand and expanded use cases.
Digital assets like bitcoin (BTC), ether (ETH), and several other altcoins have come a long way, gradually transitioning from speculative investments to crypto portfolio stablemates. As cryptocurrencies continue cementing themselves as potential disruptors of the global financial system, lawmakers and governments worldwide are taking a deeper look at better regulating this growing sector.
While regulating cryptocurrencies may have positive long-term impacts, governments worldwide, to date, remain divided on how to control this growing asset class. Since there is no central authority, each government or regulator follows a different approach in regulating bitcoin (BTC) and other cryptocurrencies.
Some countries like El Salvador have approved bitcoin (BTC) as a legal tender, and others like China have already implemented stringent regulations restricting cryptocurrencies and service providers. At the same time, countries like India and Bangladesh are still figuring out the best way to regulate digital tokens.
We reached out to Request CEO & Co-founder Christophe Lassuyt, who said that “major financial hubs like Singapore have clear licensing regimes for crypto companies. This allows crypto companies to operate with the same legitimacy as traditional financial institutions. Regulatory acceptance gives institutional investors and large multinational businesses the confidence to transact in crypto.”
That said, the crypto ecosystem offers a diverse range of products like DeFi (decentralized finance) and IEOs (initial exchange offerings), which make it difficult for regulators to build a common framework. Besides, taxation and income-based laws also vary by country and state, adding to the challenge.
Between China’s blanket ban on cryptocurrencies, and the US SEC indicating that regulations for the greater good of the community wouldn’t be as restrictive relative to China, it can be rightly expected that new rules and compliance guidelines will arrive shortly.
With this reality in mind, here’s a quick rundown of how the current regulatory scenario for cryptocurrencies looks like in some of the most prominent nations and how they may potentially shape up in the coming years.
In the US, cryptocurrencies have attracted the attention of both Federal and state governments. Federal agencies like the Securities & Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Federal Trade Commission (FTC), the Department of the Treasury, Internal Revenue Service (IRS), Financial Crimes Enforcement Network (FinCEN), and the Office of the Comptroller of Currencies (OCC), are working in tandem to build a robust regulatory policy for cryptocurrencies, especially stablecoins.
While Federal Reserve Chair Jerome Powell clarified that the US has no intention to enforce a China-like ban on cryptocurrencies, several state governments have already passed laws covering cryptocurrencies and blockchain technology.
For now, bitcoin (BTC) and ether (ETH) are categorized as ‘commodities’ and taxed as ‘property’ by the IRS. Likewise, crypto exchanges and other related services are required to file licensing with the US FinCEN as money service businesses while complying with AML, KYC, and CTR guidelines.
Speaking on the matter was also Zachary Figueroa, Counsel at bitFlyer Group, who noted:
“There seems to be a collective mind to push for a single regulatory body for the crypto industry. Adoption has effectively reached a boiling point which is sending regulators into a proverbial feeding frenzy to grab a piece of this bull market that’s showing no signs of stopping. We may see an act of Congress to either authorize or create a singular oversight to police the industry, we may even see more states creating state crypto banks, and more taxation of crypto holdings. Many have called for this over the years but it’s possible that the industry has hit a tipping point in adoption that Congress will be required to step in. In 2022, expect more regulation of the crypto industry.”
In Canada, all such crypto exchanges must register with the Financial Transactions and Reports Analysis Centre of Canada (Fintrac) and adhere to the compliance guidelines. Latin American regions like El Salvador have already accepted bitcoin as a legal tender. Several neighboring areas like Brazil, Peru, Colombia, Mexico, Panama, and others are implementing taxation and compliance guidelines for digital assets and service providers.
Post-Brexit, the groundwork for developing and implementing crypto-specific policies has picked up the pace. Back in 2020, the UK government confirmed that all types of digital assets would be classified as ‘property,’ but no specific laws and guidelines have been announced thus far.
However, the Financial Conduct Authority (FCA) and the Bank of England have started taking a closer look at service providers. All crypto exchanges operating in the UK must register with the FCA and agree not to provide crypto derivatives trading services. The UK government is tightening its regulatory policies, and platforms that have already run afoul of its policies like Binance have been prohibited from offering services.
Meanwhile, cryptocurrencies are considered legal throughout the European Union (EU), although individual governments may elect to impose their own oversight on exchanges. Taxation on cryptocurrencies also varies by country, ranging from 0% to 50%. The EU has recently rolled out the latest anti-money laundering directives (AMLD5 and AMLD6) to tighten the existing KYC/CFT obligations and standard reporting requirements for money service businesses.
Considering the current pace of countries like Germany, Hungary, Poland, Austria, and several others are implementing taxation and regulation laws on cryptocurrencies and blockchain technology, well-researched crypto-specific guidelines and policies are soon likely to be adopted across the EU.
Most countries in the Asia-Pacific region are developing the required regulatory and compliance framework for governing digital assets. However, each country has its own opinion about cryptocurrencies and is working at its own pace.
For instance, the Chinese government has announced a complete ban on cryptocurrencies, mining, and other related activities. And with China’s ongoing problems with evolving technology, there is almost no chance that any new regulations designed to facilitate use will be introduced. On the other hand, nearby countries like Japan and South Korea have legalized bitcoin (BTC) and implemented taxation and compliance guidelines.
Meanwhile, countries like Bangladesh and India allow trading and holding cryptocurrencies, but no specific guidelines have been reached. India had earlier banned the use of cryptocurrencies in 2018 but changed its stance in 2020, and the country’s central bank is working to roll out a state-backed digital currency. Likewise, the Bangladesh government has approved trading cryptocurrencies but implemented a banking ban, meaning financial institutions cannot facilitate bitcoin transactions.
In Australia, the Reserve Bank of Australia (RBA) previously indicated that trading cryptocurrencies are legal. Then, in 2018, the Australian government announced that all crypto exchanges operating in Australia must register with the Australian Transaction Reports and Analysis Centre and implement KYC policies to comply with new anti-money laundering legislation.
Neighboring nation New Zealand is pretty lenient with cryptocurrencies. The government has clarified that non-banks don’t need any additional approval from the government for storing and transferring value as long as they are not involved in issuing physical circulating currencies.
Due to the geopolitical scenario, each country globally has a diverse range of regulation and compliance frameworks, some well-thought-out and some implemented hastily. Either way, the growing dominance of cryptocurrencies across the region will play a critical role in influencing local government and regulators’ decisions and policies in 2022 and the coming years.
The Indian government will reportedly implement a regulatory framework for operating with cryptocurrencies by February next year. Instead of a complete ban, this time, the authorities will debate whether to accept bitcoin and the altcoins as an asset class.
The world’s second most populated nation is one of the fastest-growing markets for cryptocurrencies. However, the Indian government (with its controversial approach towards the matter) causes confusion on how locals can operate with digital assets.
Earlier in the year, the authorities planned to impose a total ban similar to the one in China and even criminalize the ownership and mining of cryptocurrencies.
The government started softening its stance ин the next few months, and the upcoming regulations might not be so harsh. According to a recent report, the legal framework on bitcoin and the altcoins will see the light of day by February 2022 to clarify the taxation of transactions and gains. Surprisingly, the authorities will even discuss the option of accepting cryptocurrencies as an asset class.
A spokesman at the Finance Ministry explained that enforcing certain laws on the industry is vital because the popularity of the digital assets in India attracts bad actors who could employ them in dubious activities. New rules could enable the authorities to stay on top of such operations:
“What should not happen tomorrow is that if I start a personal digital currency, and after good marketing everybody buys it and once it has appreciated, I run away since I am a private player! Everybody has actually bought that currency by using other assets. The government needs to look at regulation in order to avoid the above.”
Listening to The Experts
If India decides to treat crypto as an asset class, the move could boost the country’s economy. At least, that is what the Indian billionaire Nandan Nilekani said a few months ago.
The entrepreneur agreed with many critics that digital assets are not suitable to be used as a payment method as their fiat currency value is quite volatile and some of them consume too much energy. He instead opined that investors should consider them as a gold substitute, for example:
“Just like you have some of your assets in gold or real estate, you can have some of your assets in crypto. I think there’s a role for crypto as a stored value but certainly not in a transactional sense.”
The interest in cryptocurrencies has indeed skyrocketed in India lately as locals increased their digital assets investments from $200 million last year to $40 billion this year.
The California-based company for financial services – Tala – has raised $145 million in a Series E funding round to provide cryptocurrency solutions to developing nations. This brings its total funding to over $350 million from investors such as PayPal Ventures, GV, and Revolution Growth.
Turning Towards Crypto
According to a CNBC report, the financial service provider – Tala – plans to use the funds to expand its borrowing, savings, and money management opportunities to the following emerging countries: the Philippines, Mexico, India, and Kenya. The company intends to provide crypto offerings, too.
Shivani Siroya – Founder and CEO of Tala – noted that the COVID-19 pandemic was a wake-up call for her company to add more services aside from the traditional ones:
“During the pandemic, we saw the need for more than credit and rolled out products beyond credit, highlighting the account experience that we’re now excited to go accelerate.”
Tala focuses mainly on underbanked customers. According to Siroya, the company has lent over $1 billion to millions of clients, opining that digital assets have the potential to enhance the financial transactions:
“So we’re really looking to ensure that they have a safe place to more efficiently use their money, and that’s what we’re thinking about when it comes to crypto: how can we use this technology to really ensure that we’re supporting the essential movement of money.”
The Partnership with Visa
Earlier this year, Tala made its first interaction with the cryptocurrency industry by teaming up with the multinational financial services corporation – Visa – and the peer-to-peer payments technology company – Circle. Their goal was to provide underbanked individuals with the ability to buy, sell, and store the USDC stablecoin.
Under the terms of the collaboration, Tala would keep the acquired USDC in its digital wallet, which users could later convert into other cryptocurrencies or fiats. In its turn, Visa gave customers access to the payment provider’s credit card, thus enabling them to spend the stablecoins across all the merchants that accept those cards.
Back then, Siroya once again praised the potential of blockchain technology, which could solve global problems of financial inclusion:
“Digital currencies have tremendous potential to radically open financial access and put more control directly into the hands of underbanked and underestimated people.”
The Indian government continues with its indecisive approach towards the crypto industry. A recent report claimed that the authorities plan to implement new taxation on gains from digital asset operations instead of the recently-discussed ban.
- Citing sources familiar with the matter, the Economic Times reported that India is contemplating taking a different approach to the digital asset space.
- The local tax department considers implementing new taxation legislation for all gains made from cryptocurrency trading and investing.
- Nevertheless, the sources said this would not mean that the second-most populated nation will accept cryptocurrencies as a valid asset class. The government believes every activity generating any income for locals should be taxed.
- India is arguably the country with the most controversial views on the digital asset industry. Its central bank had forbidden all of its customers to operate with anyone even remotely associated with the space back in 2018.
- The Supreme Court reversed this decision in early 2020, but the RBI continued its stance against digital asset usage, even though some reports suggested that locals are quite fond of BTC and other cryptocurrencies.
- Instead, the Reserve Bank of India prefers to have more control over what currencies the public uses. As such, the governor – Shaktikanta Das – recently confirmed that the institutions will launch trials for a central bank digital currency by the end of the year.
- Separately, the government also wanted to incorporate an 18% tax on any foreign cryptocurrency exchanges operating in the large local market.
Shaktikanta Das – the governor of the Reserve Bank of India – said the financial institution could launch its first trial programs for a digital rupee by December this year. The initiative would determine the security of the Indian CBDC and its impact on the local economic network.
India’s Approach to a CBDC
In a recent interview for CNBC, Shaktikanta Das revealed the Reserve Bank of India’s plans to begin trials for a central bank digital currency before the end of this year. RBI’s mission would be to examine how a potential e-rupee would be incorporated in the Indian financial sector. The trial programs would also analyze the security of the future project:
“I think by the end of the year, we should be able to – we would be in a position, perhaps – to start our free trials.”
CBDC is a digital form of currency issued by a central bank. A country’s monetary authority regulates it and, as such, is highly centralized. CBDCs are still unexplored sufficiently as a financial instrument, and many experts doubt whether they will bring positives or negatives to the monetary system. With that said, Das asserted that RBI would take the matter under close attention:
“We are being extremely careful about it because it’s a completely new product, not just for RBI, but globally.”
RBI’s governor added that the central bank is split between having a centralized ledger for the digital rupee or the so-called distributed ledger technology (DLT). The latter enables the access of numerous participants while a single entity – in this case, the Reserve Bank of India – controls and operates the former.
Indians Are Keen on Cryptocurrencies
While it is still early to conclude whether the population of India would be supportive of launching a digital rupee, one thing is for sure: they love virtual assets like Bitcoin and Ethereum.
As CryptoPotato recently reported, Indians have invested in cryptocurrencies 200 times more in 2021 than in 2020. Surprisingly, the locals, who are well known as gold-lovers, started changing their investment strategy from the precious metal to digital assets.
According to the statistics, the number of people who trade cryptocurrencies in India is 15 million. It significantly surpasses a well-developed country such as the UK, where 2.3 million individuals have entered the market. Moreover, the world’s largest economy – the US – with 23 million merchants does not stand far away from India.
In fact, only one country has a higher index score of global crypto adoption than India, and that is Vietnam. It is worth noting that in 2020, the second-most populated country did not even appear on the top 10 list.