In the list of names vouching for cryptocurrency, a new entrant is R Gandhi, former deputy governor of the Reserve Bank of India, who said that cryptocurrency can be used for payments towards economic activities, weather buying goods and services, once it has been termed as an asset or commodity.
Gandhi was speaking at the inaugural session of India’s first ever crypto-asset conference, HODL-2021, organized by the Blockchain and Crypto Assets Council (BACC) of the Internet and Mobile Association of India. Gandhi, in support of cryptocurrency, said, “ It is a valid legal activity.” In the past few months, some favourable developments and acceptance of cryptocurrency across the world has boosted the sentiment and led to a sharp rally in the prices of cryptocurrency. Clearing the fog around regulatory framework and paving the way ahead, Gandhi said that the cryptocurrency needs to be treated as an asset and should be taxed on the basis of its payment channels. “On entry in a citizen’s hand, crypto should be deemed as a foreign asset. Then, it should be paid through normal channels when it is bought, if not, it will be deemed as mined, and the capital gained and taxed heavily. Then if it is proved mined, capital gained and is taxed slightly lightly. It should be fully tracked through a depository or repository of information. Then exchanges can facilitate trade– buy and sell–and settle payment and receipt,” Gandhi said.
Gandhi also made it clear that once a large section of people start using crypto assets as a mean payment then it would be a matter of concern for monetary authorities. After giant corporations, countries and influential people came out in favour of cryptocurrency, the countries, those who were against this are also striving to make a framework for it. As per many media reports, the Indian government is thinking of defining cryptocurrency as an asset or commodity. It may also come up with a way to define cryptos as per their use cases such as payments, investment or utility. Expressing his concern about the possible monetary transmission using crypto, Gandhi said, “Then the question will arise, whether monetary transmission will be possible or not using crypto. Right now it is not very clear. Here, we can have an open mind about how monetary transmission will take place even through crypto assets. I don’t have any research to confirm that, so, it is my belief that even crypto assets would be sensitive to monetary action.”
Recently, former RBI Governor and a top economist Raghuram Rajan speaking about the possible future of Cryptocurrency said that cryptocurrency may have a “ potential future”.
Rajan seemed optimistic about well-regulated stable coins, which are digital currencies linked to an underlying asset like currency or gold. He, however, pitched for appropriate regulations for such assets. Throwing light on the origin of cryptocurrency, Gandhi said, “Originally, it came out of the mistrust about authoritarian currency, and in a sense, the philosophy was to some anarchist disruption. The idea was that this is a money, which could not be taxed or traced. Thereafter, the principles have completely changed, including in India. Now, more and more people are putting faith in it and they want to deal in it legally,”
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