While the state of crypto is still unknown in India, Rama Subramaniam Gandhi, the former RBI governor, has given his views about it. According to him, cryptocurrencies should become more of an asset class.
Speaking at the inaugural Hodl virtual conference, Gandhi said that he considers cryptos an asset class compared to a mode of payment.
The former RBI governor added that the central bank should consider crypto as an asset. Moreover, the bank should impose taxes on it. On a broader subject, he meant to say that there is a need for a regulatory framework so that Indians can invest and hold digital assets.
While residents can still hold and invest in digital assets, a regulatory framework will ensure a sense of trust in the crypto community. Gandhi also added that if a user mines these digital assets instead of purchasing them, then an appropriate amount of capital gains tax should be levied:
“Cryptocurrencies should be paid for through normal payment channels. If they are not, it should be deemed mined, and capital gains tax must be levied. That is like voluntary disclosure.”
Generally, if cryptocurrencies work under a regulatory framework, there are fewer chances of illicit transactions using cryptocurrencies. Moreover, authorities can track potentially illicit transactions and take appropriate action.
In conclusion, the former deputy governor said that the government should proceed with cryptocurrencies open-mindedly. However, he added that some blockchains with their privacy-centric nature should adhere to the compliance rules. In his words:
“A state will always want to give freedom to its citizens in terms of economic transactions. It enforces contractual obligations and taxes income and gains. So, any economic activity should be amenable to these kinds of things.”