Crypto Can Be Used As Payment Once It Is Qualified As An Asset: Former RBI Deputy Governor

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Former Reserve Bank of India (RBI) Deputy Governor R Gandhi believes that crypto can be used for payments to economic activities, purchase of goods or services, once it has been qualified as an asset or a commodity.

It’s a valid legal activity, ”Gandhi said at the inaugural session of India’s first-ever cryptoassets conference, HODL2021, hosted by the Blockchain and Crypto Assets Council (BACC) of the Internet and Mobile Association of India (IAMAI).

Describing a possible regulatory framework for crypto assets, the former deputy governor of the RBI said that crypto should be treated as an asset and should be taxed based on its payment channels.

According to recent media reports, the government can also define cryptocurrencies as an asset or a commodity for any purpose, including taxation. It can also come up with a way to define cryptos based on their use cases such as payments, investment, or utility.

Upon entry into the hand of a citizen, crypto should be considered a foreign asset. Then it should be paid through the normal channels when purchased, otherwise, it will be considered mined, and capital earned and heavily taxed. Then, if it is proven to be mined, the capital gains and is taxed slightly lightly. It should be fully tracked through an information repository or repository. Then exchanges can facilitate trade, buy and sell, and settle payment and receipt, ”Gandhi said.

Gandhi, however, felt it would be a matter of concern to monetary authorities once a large portion of the population began to use crypto assets as a means of payment.

Then the question will arise whether or not monetary transmission will be possible using crypto. Okay, now it’s not very clear. Here we can have an open mind on how currency transmission will take place even through crypto assets. I don’t have any research to confirm this, so I think even crypto assets would be sensitive to currency action, ”Gandhi said.

According to the expert, having access to genuine information about how much crypto has been mined and how much is bought, sold or held by people would facilitate regulation.

The expert felt that crypto has come a long way in terms of principles.

Originally, it came from distrust of authoritarian money, and in a sense, the philosophy was at some anarchist disruption. The idea was that it was money, which could not be taxed or traced. Subsequently, the principles changed completely, including in India. Today more and more people believe in it and want to treat it legally, ”Gandhi said.

During the session, Gulshan Rai, India’s Senior Cybersecurity Coordinator and Advisory Board Member, BACC, said regulators should look at cryptocurrencies in a democratized and sustainable way.

From an industry perspective, Sumit Gupta, CEO of CoinDCX, said blockchain technology, which enables cryptocurrency to exist, can be even more transparent than current fiat systems. If we use the right tools and the right technology, we can create an even better ecosystem than we have now, ”added Gupta.

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