After India’s finance minister announced that the cryptocurrency sector will be one of the country’s priorities during its future G20 presidency that begins in 2023, a crypto hedge fund CEO has offered his views on India’s current crypto stance and its ability to lead the global crypto regulation efforts.
Specifically, Anto Paroian, the CEO and Executive Director at the crypto hedge fund ARK36 agreed with finance minister Nirmala Sithamaran that regulating crypto should be a globally coordinated effort, but he isn’t sure that India is the best country to steer it, according to his comments shared with Finbold on November 2.
Paroian acknowledged, investors and crypto businesses would benefit from more consistent rules, as they would open them up to more customers and markets, and cryptos do require “some degree of unification of their legal status and a consistent regulatory approach across jurisdictions” to become a universal financial asset.
Is India capable of leading the crypto regulation effort?
However, Paroian is uncertain about the current treatment of digital assets by the Indian government which sees them “more as a threat than an opportunity,” when 20% of the population is unbanked and crypto would give them better access to financial services.
According to him:
“Instead, the Indian government sees cryptocurrencies as a tool for ‘drug funding, terror funding or just gaming the system.’ Such ideas are obsolete and paint a false picture of a massive and incredibly innovative global industry which at its core is driven by the ideals of a fairer financial system.”
Finally, he believes that India’s success in leading a global crypto regulation effort must be preceded by “an honest effort to better understand this space and its goals.”
What is the government’s current stance on crypto?
Back in May, Ajay Seth, India’s economic affairs secretary, told reporters that the government’s consultation paper on cryptocurrencies was ready, citing the need for a worldwide agreement on cryptocurrencies.
In July, Sitharaman said the country’s central bank, Reserve Bank of India (RBI), was pushing for the ban on cryptocurrencies, maintaining that they should be prohibited as they threaten the country’s financial stability.
For the time being, India has a 30% tax rate on cryptocurrency earnings, which the CEO of cryptocurrency exchange Binance, Changpeng Zhao, said was “probably going to kill the industry,” in livestreamed remarks during a panel at a fintech conference in Singapore on November 3.