Latest News Today – Reserve Bank Of India (RBI) Eyes Phased Roll Out Of Its


RBI has voiced its concern over the use of cryptocurrencies which it sought to outlaw in 2018

The Reserve Bank of India is considering a phased introduction of its own central bank digital currency (CBDC), deputy governor T. Rabi Shankar said, and is examining various issues including the underlying technology and issuance method.

“CBDCs are likely to be in the arsenal of every central bank going forward. Setting this up will require careful calibration and a nuanced approach in implementation,” Shankar said according to a speech released late on Thursday. “As is said, every idea will have to wait for its time. Perhaps the time for CBDCs is nigh,” he added.

According to a 2021 survey by the Bank for International Settlements, 86 per cent central banks were actively researching the potential for CBDCs, 60 per cent were experimenting with the technology and 14 per cent were deploying pilot projects.

China leads the space and has already started trials of a digital currency in several cities while the U.S. Federal Reserve and Bank of England are looking into it for a future launch.

RBI has been working on the idea of CBDC for years. Virtual currencies (VCs) like bitcoin have gained popularity in India in recent years and unofficial estimates suggest the country has around 15 million investors holding over Rs 100 billion ($1.34 billion) in crypto assets.

The RBI has repeatedly voiced its concern over the spread and use of cryptocurrencies which it sought to outlaw in April 2018. It had to withdraw the ban in March 2020 when the country’s top court said the move was unconstitutional.

“CBDCs are desirable not just for the benefits they create in payments systems, but also might be necessary to protect the general public in an environment of volatile private VCs,” Shankar said with regards to the need for CBDCs for emerging economies.

Sameer Narang, chief economist at Bank of Baroda said investors would still look to private digital currencies, which have appreciated in value despite recent falls.

“Some users may want to use the private digital currencies as store of value and not only for payments,” he added.



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Latest News Today – How To Invest In Cryptocurrency, Traditional Currencies


Leading cryptocurrencies -bitcoin and ethereum suffered hefty losses in the past few months

When compared to fiat currencies, crypto assets have an almost inverse relationship with macro-economic factors such as inflation growth, Mr Sumit Gupta, CEO and Co-Founder of CoinDCX told NDTV. ”Considering the fact that crypto-assets like bitcoin (BTC) are digital tokens that can be exchanged between two parties directly with low transaction fees, their value is currently influenced by the increasing adoption rate and burgeoning transaction volumes,” said Mr Gupta, while discussing the factors that determine the movement of cryptocurrencies. 

The comments from the industry leader come at a time when leading cryptocurrencies such as bitcoin and ethereum have witnessed heavy volatility in the last few months, registering hefty losses after China announced a ban on its financial and payment institutions from providing cryptocurrency services.

As the digital currencies struggle to rebound, investors have again drawn concerns over the volatile nature of crypto assets, compared to the predictable nature of traditional currencies. 

Traditional currencies usually react to the macro-economic developments and foreign exchange interventions taken by central banks. However, Mr Gupta describes that crypto assets remain largely ”unperturbed” by the measures with no control exerted by central banks and continue to derive value based on their utility as a safe, secure, and de-regulated financial token.

”Unlike traditional currencies, their supply is predetermined and limited to a certain maximum threshold which is a huge driver for further price discovery due to the increasing demand,” added the CEO of the country’s largest and safest cryptocurrency exchange. 

Cryptocurrency’s future in India

In developed economies such as the United States, the recent losses suffered by leading cryptocurrencies prompted investors to book profits in stocks and other risk assets, which rallied massively on hopes of an economic recovery.

However, in a country like India, where many people are still not well-versed with investing in risky assets, the future of cryptocurrency in the country may be questioned. ”Indian investors are known to have a long-term approach towards investing and remain committed to promising sectors or asset classes,” claimed Mr Gupta. 

As the government is yet to legalise crypto investing in India, many have concerns over the legal ramifications of investing in cryptocurrencies. ”Concerns related to the taxation policies governing crypto assets once addressed will lead to more clarity and drive further participation from Indian investors in this promising space,” he added. 

Long-term Vs short-term investment approach: What is better for crypto markets? 

Given the volatile nature of crypto markets, first-time investors are often hesitant to play with cryptocurrencies. But the CoinDCX leader recommends new investors to take the plunge and research the crypto asset before taking any fresh positions. ”They should exercise due caution considering the recent volatility in prices and would benefit from adopting a long-term investment approach when it comes to crypto assets,” said Mr Gupta. 

He has a piece of special advice for all those taking a short-term investment approach in crypto markets. ”For traders looking to play short-term movements, it is crucial to enter at important support levels and maintain a strict stop loss in proportion to above levels and their risk appetite.”

”Lastly, when we look at the past performance of major crypto assets, it is evident that investors with a longer investment horizon have benefited from multifold returns,” explained Mr Gupta. 



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Digital Currency In India: Government Plans To Ban | Sidnaz Blog


The new crytocurrency bill is listed for debate in budget session

Digital Currency in India: The government is planning to introduce a law to ban all private cryptocurrencies such as bitcoin and put in place a framework for an official digital currency to be issued by the central bank, according to a legislative agenda listed by the government. The law will “create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India (RBI),” said the agenda, published on the Lok Sabha website on Friday, January 29. (Also Read: Bitcoin Falls 10% To $31,534 Retreating From Record Highs: All You Need To Know )

‘The Cryptocurrency and Regulation of Official Digital Currency Bill 2021’ listed for debate in the budget session, seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.

In 2019, a government panel recommended banning all private cryptocurrencies, with a jail term of up to 10 years and heavy fines for anyone dealing in digital currencies. The panel has, however, asked the government to consider the launch of an official government-backed digital currency in the country, to function like banknotes, through the Reserve Bank of India. In 2018, the central bank ordered financial institutions to break off all ties with individuals or businesses dealing in virtual currency such as bitcoin within three months.

However, in March 2020, the Supreme Court allowed banks to handle cryptocurrency transactions from exchanges and traders, overturning a central bank ban. Many central banks across the globe are exploring ways to regulate cryptocurrencies but no major economy has taken the step of placing a blanket ban on owning them. The world’s most popular cryptocurrency, bitcoin, is still not recognised as legal by many banks. Concerns have been raised about the misuse of consumer data through cryptocurrency and its possible impact on the financial system.

‘The Cryptocurrency and Regulation of Official Digital Currency Bill 2021’: Here’s what crypto experts have to say on the new cryptocurrency bill proposed to be introduced by the government
 

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Mr Sumit Gupta, Co-founder and CEO, CoinDCX :

“Since the government is considering introducing the bill during this session of Parliament, we are  sure the government will definitely listen to all the stakeholders before taking any decision. We are talking to other stakeholders and will definitely initiate deeper dialogue with the government and showcase how we can actually create a healthy ecosystem in unison”

 Mr Rahul Pagidipati, CEO at ZebPay:

”Bitcoin and most crypto assets are more like gold and not an alternative to government-issued legal tender. Crypto assets and digital government currency can coexist and together, they can bring tremendous benefits to the Indian economy.”

”We hope the Lok Sabha members and advisors will consult crypto and blockchain companies as they make their decisions. Millions of Indians have already invested in this new asset class. Millions more want the same opportunity to build wealth that investors in other countries already have. We have faith in the government and hope that this bill will move India forwards, not backwards.”
 



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Amend Income Tax, GST Laws To Accommodate Crypto | Sidnaz Blog


Budget 2021: A proper recognition for cryptocurrency can accelerate its contribution to the GDP

Budget 2021: Considering the ambiguity among investors pertaining to the tax applicability for the income earned from crypto trading, the upcoming budget should bring in amendments in the Income (I-T) Tax and GST laws to offer more clarity to investors, traders, and crypto organizations, stated Mr Sumit Gupta, CEO, and Co-Founder, CoinDCX, one of the country’s largest cryptocurrency exchange. In order to tackle anti-money laundering or AML and other funding concerns, the government should consider a formal direction to exchanges to follow the virtual assets guidelines of the financial action task force (FATF), he explained. 

As several companies related to cryptocurrency are setting up base in the country, the crypto industry seeks foundation and recognition. A proper recognition can accelerate its contribution to the gross domestic product (GDP) as well as the rate of employment. It may create a trust factor among retail investors and institutional players. My Gupta added that recognising crypto as a tradable commodity will be a significant relief.

Cryptocurrency has been emerging as one of the fastest-growing digital assets across the world it has witnessed steady traction in India after the Supreme Court lifted the banking ban. It has also generated massive interest from investors in the country.

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Meanwhile, yesterday on January 21, cryptocurrency bitcoin slipped 10 per cent, to a 10-day low, retreating further from its peak record highs, as traders expressed concerns of tighter US regulation. The world’s most popular cryptocurrency was last up 4.14 per cent at $32,439.6. Bitcoin lost nearly a quarter since achieving a record $42,000 on January 8, 2021 continuing its broader bull run. the bull run was witnessed since October 2020 as investors’ sentiment weighed in on the virtual currency’s inflation hedging qualities and potential for quick gains.



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