Even if affected, the Indian government or the central bank Reserve Bank of India (RBI) cannot do much because there is no regulation in India for cryptocurrency. RBI has regularly expressed concerns about the impact of virtual currency and in particular cryptocurrency on macroeconomic stability and advised clients who invest in such aids that they do so at their own risk.
In 2001, the Union government imposed a 30% tax rate and 1% TDS on virtual currency assets to deter people from investing in the sector and introduce some kind of regulation . Indian Finance Minister Nirmala Sitharaman also recently said that India alone cannot ban the use of crypto without international collaboration and that every country should come under the same umbrella to decide the future of crypto. cryptography and see its pros and cons.
There are indications that RBI will launch the full services soon once the pilot is successful and this would be another step to introduce a regulated virtual currency different from unregulated and decentralized cryptocurrency.
The FTX fiasco has brought many issues to the table. It showed how volatile the cryptocurrency ecosystem is and reinforced the need for regulatory oversight and consultation between nations. The global tax system must provide a workable approach as soon as possible before more consumers lose money investing.
(Subimal Bhattacharjee is a commentator on cybersecurity and security issues in North East India. He can be reached @subimal on Twitter. This is an opinion piece and the views expressed are those of the author. The Quint neither endorses nor is responsible for them.)