While the government of India gets ready to usher the application of Blockchain Technology, into the real-world digital economy, Blockchain activists find it an interesting episode where cryptocurrencies have made a greater impact on the economy and found its way to get mentioned in the Budget 2018. Needless to say, that the Blockchain Technology and its impact is so widespread that it has become a general understanding that the technology exists in the real world occupies a stronger position in the financial sector.
"The recent run-up of Money Trade Coin to scale new heights with its valuation soaring, while an exploding interest from the mainstream investors, has made headlines, the digital asset created a buzz in the media. The Money Trade Coin Group established globally, is keenly tracked by the experts and such even ask for whether Money Trade Coin would ever replace the Economic Freedom Index that measures as to what degree has the world’s nations adopted economic freedom in their ecosystem."
Coming back to the current topic of the Indian government and the Union Budget 2018, F.M. Arun Jaitley had mentioned in his budget speech that:
“The Government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system. The Government will explore the use of Blockchain technology proactively for ushering in the digital economy.”
This statement has led to a speculation among blockchain activists and investors at large on what’s the government’s take and a legal stance on cryptocurrencies.
Amit Lakhanpal, Founder & Director of Money Trade Coin group was interviewed by our journalist at CCM and it’s interesting to hear what the big bull of cryptocurrency has to mention on the government’s take.
CCM: FM Arun Jaitley had mentioned cryptocurrency and Blockchain Technology in his Budget speech. How does it impact the system?
Amit Lakhanpal: One of our missions is to legalize cryptocurrency investments in India and across the globe and while the Indian government had mentioned cryptocurrencies in such a significant event of the Union Budget, we find it very interesting that cryptocurrencies in a very short span have created a profound impact in the economy.
Given the open-source nature of the blockchain technology, there are gaps in regulating cryptocurrencies and the digital asset is heavily misused in illicit use and financing illegitimate activities. We agree with the stance of the Indian government to eradicate the problem of unlawful use of such assets and we have from the start of our token maintained all the KYC and AML guidelines laid by the government with complete transparency to curb such illicit use and fraudulent activities.
CCM: How does it impact the cryptocurrency holders and traders?
AL: The government has announced that cryptocurrencies are not legal tender and it does not consider such digital tokens as money. Currently, except Japan, no other country has legalized cryptocurrencies as alternative money. However, the Indian government does not indicate that it intends to ban any exchanges that provide the investors with a platform for buying/selling multi-cryptocurrencies or investing in them. As such the Money Trade Coin group has all the security measures in effect and follows the highest standards of KYC since the start that helps us to prevent any illegitimate activities from happening in the first place. So, no, the government has not banned investments in cryptocurrency and neither does it stop any individuals from holding such digital assets.
CCM: Since the topic of Cryptocurrency and Blockchain came up in the Budget speech, what can Indians expect from the regulators or the government now?
AL: To regulate such an expansive and an open-source technology in itself is a huge challenge that any government will face. The Indian government is no exception to it. Currently, barring a few activist governments, no country has released an official policy framework to structure the investments in cryptocurrencies and develop the Blockchain ecosystem.
We can expect that Indian government would release a policy framework around cryptocurrencies later in the year which will eventually lay ground terms to form policies and regulate the market. Moreover, there is less clarity on how the gains from such virtual currencies should be taxed. There should be a viewpoint on a case-to-case basis wherein the income earned by individuals from cryptocurrency investments be taxed as “capital gains” or “profits and gains from business” taking into effect each and every transaction placed by such individual in the given financial year.
CCM: Another aspect of Money Trade Coin and other cryptocurrencies surrounds the payment solutions and while the FM states that cryptocurrency is not a part of ‘payment system’, what’s your take on this issue?
AL: Recently a lot of digital wallets have exploded in the market with multiple payment mechanisms and such have been added in the payments scenario for they are simply backed by fiat money or in our case Indian rupees. There are multiple aspects to a payments systems, a few being settlement mechanism that happens in the case of electronic cards while others include banking system and multiple others. All such payments are backed by the so-called ‘fiat money’ in any country.
While in the case of cryptocurrencies, such assets have its own value. Other popular asset that follows such trait is Gold. So what the Finance Minister must be saying is the cryptocurrencies, like gold, cannot become a part of such payment mechanisms. However, similar to gold, people can accept cryptocurrencies in a barter trade and such trades are valid as long as both the parties involved in such trade records the transaction. Here comes the role of blockchain records as when the transfer of cryptocurrency happens, the trade is automatically recorded in the blockchain and stays there permanently. So this essentially becomes an asset barter transaction.
However, more clarity on what the Finance Minister meant when he made such statement is awaited.
CCM: A recent issue where banks pulled their names out of the crypto-exchanges in India. Does this hint that banking industry isn’t supporting the technology?
AL: The recent crackdown of the government on cryptocurrency investors saw multiple tax notices being sent to such investors. However, clarity from the RBI is still awaited and as of yet, the Central Bank hasn’t issued any circular on this.
Hence, due to the lack of clarity, the market saw a knee-jerk reaction and the names were pulled out of the support in anticipation of an unsecured future of such assets. However, there are certain banks that have taken a step forward in understanding this technology and have taken the risk in servicing the industry and we do admire such banks.
While the customer issues with particular banks still remain, it is also a fact that there is strong interest towards crypto-investments and we are also witnessing a huge inflow of customers opening accounts on a daily basis.
CCM: What’s the role of Money Trade Coin Group in all these and is it coordinating with the Indian government on the regulations part?
AL: Look cryptocurrencies are an unregulated market and they are highly volatile in nature. We regularly keep updating our investors on such risk aspects of the asset and advise to factor-in all the risk factors and accordingly invest in such volatile tokens.
While coming to our role in framing regulations, Money Trade Coin Group is now established in over 40 different countries globally and while for cryptocurrency business, growth happens on its own, we feel it’s our responsibility to offer our support to the Indian government to regulate the crypto-market. And hence, we have drafted a proposition on how to regulate cryptocurrencies market in India and addressed the PMO’s office to look at the matters and we are also ready to support the government in such challenging task in any way we can.
CCM: Interestingly, the FM spoke about ushering Blockchain Technology into the digital economy. What’s your take on this?
AL: Blockchain Technology is vast and its applications are endless. So far, we are experimenting ourselves and our team is pushing limits to explore the benefits that such advanced technology provides. So there are large-scale opportunities when we talk about the implementation of such technology in a country. However, it’s a long run and such commercial applications of the Blockchain Technology will be explored for when we have come this far, the pace of growth would accelerate.