India’s impending regulations on cryptocurrencies, which in all likelihood will not be favourable, have spurred a comparison with laws in other countries. Sure, bitcoin and cryptocurrencies are a Western phenomenon (which the Chinese caught onto) and it is understandable that friendly regulations have been behind their organic growth.
An overview reveals that in most major countries and blocs, regulators treat cryptocurrencies as assets and gains in these are taxed like financial transactions. Moreover, crypto-related business entities are often licensed by local financial regulators in line with defined conditions.
Recently, bitcoin was back in the limelight after it’s price zoomed 4x to $60,000, mostly because it received extraordinary interest during the Coronavirus (Covid-19) pandemic, when regular investment asset classes (debt and equity) slumped. Also during the Covid-19 pandemic, several major firms like Sqaure and Tesla revealed treasury holdings in bitcoin, in what was a huge backing. Growing also, in the background, are initial coin offerings (ICOs) and things like Facebook’s Libra and China’s digital Yuan.
The world of cryptocurrencies is far bigger than just bitcoin. It includes tokens backed against fiat, tokens meant for cross-border payments by banks, tokens to raise funds similar to equity financing, and a growing trove of businesses around lending and financial services in crypto.
Market participants, dead against the blanket ban, say that this nuance is missing in India’s stance, and also argue that in most countries regulators are approaching laws from the point of view of