Indian investors in the dark as cryptocurrency ads gain momentum
“Kya aapke portfolio mein crypto hai?” If you’ve read such ad lines recently – and now watch cryptic ads while surfing IPL 2021, YouTube, and various social media platforms – be sure to save your hard-earned cash for a while.
Indian cryptocurrency players are bombarding people with advertisements across all platforms – doubling their marketing spend as cryptocurrencies have yet to be accepted as legal tender and lack a legal framework and regulatory standards in the country.
The ball is currently in the court of the Ministry of Finance and the Reserve Bank of India (RBI). A cryptocurrency bill is expected during the winter session and until the picture is clear, investing in cryptocurrencies can be a dangerous decision, legal experts warn.
“Cryptocurrency is unregulated digital currency, not legal tender and subject to market risk,” is a thin line at the end of the ads, not visible to many who have started investing through various crypto exchanges.
Read | Indian Crypto Market Grows 641% In Past Year: Report
Few players are asking Indian investors to invest in cryptocurrencies, mainly because there is a big legal vacuum in the country, according to Dr Pavan Duggal, a veteran Supreme Court attorney and cyber-law expert.
“India has still not decided how it wants to manage cryptocurrencies. These are not legal tender in India. According to the judgment of the Supreme Court of India, the Reserve Bank of India India is the nodal statutory authority to deal with all aspects of cryptocurrency, however there is still work to be done in this area, ”Duggal told IANS.
If we view cryptocurrencies as mere electronic records, they could be subject to legality under section 4 of the Information Technology Act 2000. However, there is a lack of proper capacity building and awareness among Indian investors on the legal capacities and nuances of cryptocurrencies.
“The government cannot be a silent bystander as open calls are made to ask Indian investors to invest in cryptocurrencies. Without proper homework on cryptocurrency legality in India, simply prohibit players from asking Indian investors to invest in cryptocurrencies wouldn’t work either. ”Duggal elaborated.
India has seen a surge in popularity of crypto exchanges and platforms in recent months like CoinSwitch Kuber (CSK), WazirX, CoinDCX, ZebPay, Unocoin and BuyUcoin etc.
Within 15 months of starting operations in India, CoinSwitch Kuber is India’s largest crypto exchange with over 10 million users. Out of a total of 10 million users, 7 million are active users on the platform with a monthly transaction volume of Rs 15,138 crore.
The local crypto exchange Unocoin has launched deposits through UPI wallets in Indian currency for faster reloading to buy and sell Bitcoins and other cryptocurrencies on the platform.
“There is still uncertainty among potential users regarding the use of cryptocurrency versus real money. We want all of our users to have the ease of trading or trading on our platform,” said said Sathvik Vishwanath, CEO and Co-Founder, Unocoin.
According to a report by Nasscom, the umbrella organization of the computer industry, 15 million retail investors in India are investing in the crypto space.
New Delhi-based cyber law expert Virag Gupta said several emerging sectors of the digital economy do not have an established legal framework or regulatory network.
“Cryptocurrency is a unique field, as it is subject to simultaneous regulation by the ministries of law, finance and commerce, alongside the RBI and SEBI. the Ministry of Finance, ”Gupta told IANS.
Legal approval by the RBI and legislation passed by Parliament could pave the way for legal trade.
“It is a misconception to believe that a conducive regulatory environment will harm the cryptocurrency industry. On the contrary, to cement a certain future, detailed case law delving deep into the currency and technology essential to the industry must be crafted. “Gupta suggested.
Otherwise, the entire industry could be subject to uncertain government intervention “such as measures employed by the Chinese government which resulted in loss of confidence, investment and overall destruction of the market.”
China’s central bank announced last month that all cryptocurrency transactions are illegal, effectively banning digital tokens like Bitcoin, Ethereum, and Solana, etc.
When Bitcoin crossed $ 50,000 again last week, Shivam Thakral, CEO of BuyUcoin, said there had been a paradigm shift in investment models around the world, which is underscored by the shared data. by crypto exchanges from time to time.
“The Indian middle class population is ready to explore digital assets to build long term wealth in order to achieve their goals, which may not be possible with any other asset class,” he said. said Thakral.
However, it is possible that gullible Indian investors will invest in cryptocurrencies, only to find that their business interests have been harmed.
“This is a golden opportunity for the Indian government to explore mechanisms that allow it to ride the cryptocurrency tide and also to draft legal frameworks to regulate cryptocurrencies,” Duggal said. .
To cement a certain future, “detailed case law delving deep into industry-critical currency and technology must be crafted,” Gupta added.
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