Crypto assets Financial News

Crypto Assets (MiCA) Legislation, a first-of-its-kind framework for regulating crypto-assets. The legislature had been in consultations for over two and a half years before it was finally accepted by the European Parliament as a comprehensive set of regulations for the crypto ecosystem in Europe. MiCA came into force in May 2023 after receiving formal approval from the European Council.

Issues related to crypto currency and its challenges were discussed at the meet.

International Monetary Fund and the Financial Stability Board (FSB) with jointly preparing a technical paper on crypto assets. The paper could be used to formulate a coordinated and comprehensive policy to regulate crypto assets. The G20 will draw up a universally acceptable international framework to regulate crypto assets and said that only a central bank-backed monetary unit would qualify as a currency. «To complement the ongoing dialogue on the need for a policy framework, the Indian Presidency has proposed a joint technical paper by the IMF and the FSB, which would synthesise the macroeconomic and regulatory perspectives of crypto assets,» according to an official statement. The joint technical paper would be presented at the finance ministers and central bank governors meeting in October 2023, it said.

Nirmala Sitharaman on Monday said crypto assets and web3 sectors require significant international collaboration for effective implementation of domestic legislations. She said these are relatively new and still evolving sectors, with no specific regulations. «By definition, these sectors are borderless and require significant international collaboration for any specific legislation on these sectors to be fully effective,» Sitharaman said in a written reply in the Lok Sabha. The minister was replying to a question by DMK MP T Sumathy on whether the government has prepared any future roadmap to regulate virtual digital assets / cryptos/web3 sectors in the country. In reply to a separate question, Minister of State for Finance Pankaj Chaudhary said the government is engaging with G-20 countries to build international coordination on regulating crypto assets.

crypto industry has great expectations from the upcoming Union Budget of 2023. The Industry is hoping that FM Nirmala Sitraman will bring a number of changes, specifically how Virtual Digital Assets (VDAs) are classified and taxed. The 2 major demands are: 1. The 1% tax deducted at source (TDS) on sale transactions of Crypto assets should be abolished. This tax causes investors to lose capital with each trade and discourages prospective investors from participating in this market, resulting in a loss of capital investment in crypto assets. 2. The current tax architecture should be changed to allow for set-off and carry forward of losses in VDAs similar to equity shares/derivatives. The 30% threshold was set in response to comparisons of digital assets with highly speculative avenues such as gambling, betting, and so on. However, VDAs are similar to securities trading and should, therefore, be treated similarly with respect to taxation and setoff benefits. According to Delhi-based think tank The Esya Centre, the 30% tax and 1% TDS led to a cumulative trade volume worth Rs 32,000 crore shifting from Indian crypto exchanges to foreign ones between February and October 2022. The study also estimated that the current tax architecture may result in a loss of approximately Rs 99.3 trillion of local exchange trade volume over the next four years.

Digital Rupee (or the e₹), it indicates the design choices that the RBI is inclining towards to pursue these motivations, it briefly charts a forward-looking path till the launch of the e₹, and it pushes policy debate into the next gear – from speculation to contentions on merits on motivations, design, outcomes. Yet, misalignments abound – particularly about what the RBI expects of the e₹ and what it can be reasonably expected to deliver. One example is the impact a CBDC would have on the wider adoption of crypto assets and stablecoins. Globally, central bankers are divided in opinion on whether the emergence of crypto assets led to an acceleration of their CBDC projects: in a May 2022 survey by the Bank for International Settlements, six out of ten respondent central banks agreed. This may have been because a clear assessment of the adoption of crypto assets for different use cases and their impact on the economy appears to have so far eluded policymakers: the same survey indicated that a majority of central banks largely characterized the use of crypto assets in their jurisdictions – both in relation to domestic payments and cross-border payments, as “use by niche groups” and “trivial or no use”. Earlier in February 2022, the Financial Stability Board (FSB) had acknowledged significant data gaps that made an assessment of the impact of crypto assets on financial stability difficult to identify and quantify.

crypto assets led to an acceleration of their CBDC projects: in a May 2022 survey by the Bank for International Settlements, six out of ten respondent central banks agreed. This may have been because a clear assessment of the adoption of crypto assets for different use cases and their impact on the economy appears to have so far eluded policymakers: the same survey indicated that a majority of central banks largely characterized the use of crypto assets in their jurisdictions – both in relation to domestic payments and cross-border payments, as “use by niche groups” and “trivial or no use”. Earlier in February 2022, the Financial Stability Board (FSB) had acknowledged significant data gaps that made an assessment of the impact of crypto assets on financial stability difficult to identify and quantify. The RBI’s stated expectation is that the e₹ will provide the benefits of virtual currencies but at the same time protect financial consumers and avoid the ‘damaging social and economic consequences’ of crypto assets. If it’s too good to be true, it usually is, and this appears to be the case with the RBI’s projection of the e₹ as being a panacea to the many risks associated with crypto assets and stablecoins.

Nirmala Sitharaman's written response in Parliament again brought the 'spotlight' to crypto assets or virtual currencies (VCs) as she called for 'global collaborations' to prohibit these assets. However, the industry, as always, is reading too much between the lines, taking out the positive for the industry with some silver lining for the stakeholders. "Cryptocurrencies are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards," FM's reply said.

Nirmala Sitharaman said that cryptocurrencies could be banned or prohibited only after significant international collaboration on the risks, benefits, evolution of common taxonomy and standards. Sitharaman's statement on cryptocurrencies or Virtual Currencies (VCs) in Parliament was in response to a five-pointer question by Thirumavalavan, a member of Parliament from Tamil Nadu's Chidambaram. The questions were about the Reserve

GARI token, a crypto asset endorsed by Bollywood's megastar Salman Khan, has plunged about 90 per cent in the last 24 hours over rumoured hacks and wrongdoings. The Gari Network's GARI token, powered by the social media platform for content creators ChinGari, dropped about 87 per cent to below $0.1 from $0.75 on Wednesday. However, it recovered mildly and was trading at $0.132 on Thursday. Even the volume of the token has taken a big hit, which has plunged to half in the 24 hours. Tokens worth $56.43 million were traded in the last 24 hours, suggests data from Coinmarketcap.

The industry has been actively lobbying for positive regulations. Budget 2022 did not directly provide any indication of regulatory clarity. However, it did introduce a new scheme of taxation on crypto. Section 115BBH was introduced to tax all gains from the transfer of virtual digital assets (VDAs) at 30% without allowing any deduction for expenses nor setoff of any loss. Further, Section 194S was introduced to deduct TDS at 1% on all transfers of VDAs with an intention to widen the tax base. These provisions are applicable from the financial year 2022-23 (FY23).

“It's worth noting there’s a flight towards quality crypto in the market. The Bitcoin dominance has climbed to 45%, suggesting investors have moved capital from lesser-known coins to quality crypto,” says Ashish Singhal, Co-founder and CEO, CoinSwitchThe crypto market, with no doubts, is in a tight bear grip. How do you see this phase and how long can it sustain? Do you think the Indian market and investors are mature enough to handle the long crypto winters?The supersized hike by the US Fed to control inflation has impacted the capital markets – be it traditional equities or cryptos. With capital becoming expensive, it was inevitable the markets would be bearish as investors temper their risk appetite. It is worth noting the strong correlation between Bitcoin and Nasdaq Composite, suggesting investors are valuing crypto assets in the same breath as deep tech stocks. We also have to keep in mind that asset classes such as cryptos are coming off a multi-year bull run. Course correction is thus understandable.

Major cryptocurrencies traded in the red early on June 17 as the global crypto market cap increased 6.88 per cent to $893.36 billion over the last day. Total crypto market volume dropped to $75.88 billion. The total volume in DeFi stood at $6.24 billion, 8.23% of the total crypto volume in the last 24 hours. The volume of all stable coins was $65.58 billion, which is 86.42 per cent of the total crypto market's 24 hour volume, according to CoinMarketCap. The price of Bitcoin hovered over Rs 17 lakh, down nearly 8 per cent with a dominance of 44.47 per cent. Read More[/body[/content]

Cryptocurrency exchange Binance has opened 2,000 positions for hiring, Chief Executive Officer, Changpeng Zhao, said on June 15, a sharp contrast to a slew of job cuts by companies operating in the digital currency space.

To keep the spirits of traders, HODLers, and investors up, leading crypto exchange CoinSwitch regularly lists utility-focussed tokens. Here’s a list of five crypto assets to keep you going too. The list has been created keeping the future potential, existing growth cycles, and the impact on real-world industries in mind.

European Central Bank President Christine Lagarde said crypto-currencies are “based on nothing” and should be regulated to steer people away from speculating on them with their life savings.

Crypto asset management platform, Mudrex, has registered a 2,400 per cent increase in its user base for the first quarter of 2022, making it the largest crypto index investing platform. Indian users contributed the most to this growth with a contribution of more than 80 per cent. Founded in 2018, Mudrex curates investment solutions and automates investing products for the average investor for long-term wealth creation. Y-combinator backed Mudrex is known for its systematic approach to familiarizing crypto investments, with a decent product portfolio including Mudrex Coin Sets.

Hot Drops, an NFT marketplace, has launched its own platform NFT.LA after raising about $2.4 million in the seed funding round. Hot Drops seeks to solve issues that have long plagued the entertainment industries, with the platform paving the way to be a leader in the protection of minors accessing adult content. «It is ahead of the curve on the enforcement of regulations being passed in several countries around the world, through uniquely age-verified accounts to purchase or view content and enforces an invite-only acceptance program for established creators. Hot Drops is shifting the paradigm of content being taken for free and rewarding loyal fans for purchasing content in a gamified experience,” a statement issued by Hot Drops stated.

Crypto-exchange analysts warn that the TDS will suck liquidity out of the market.

crypto assets in February, it was the 30% rate on income from digital-asset investments that grabbed headlines. But it’s a different levy that has the industry warning of a potentially destabilizing liquidity crunch. Along with the capital gains charge, the finance ministry announced a 1% tax deductible at source, or TDS, on all digital-asset transfers above a certain size, starting July 1. No other country imposes such a tax on crypto, according to Anoush Bhasin, founder of crypto asset tax advisory firm Quagmire Consulting. Crypto-exchange executives, lawyers and tax analysts warn that the TDS will suck liquidity out of the market by forcing high-frequency traders to dramatically curtail their trading. Combined with the government’s decision not to permit offsetting of trading losses in digital assets, it threatens to accelerate an exodus of crypto companies and workers from India, they say.

Calling it a historic moment in the evolution of the Indian crypto industry, Shivam Thakral, CEO of BuyUcoin said that this move will make the crypto market more organized and disciplined. «Like every new law, crypto tax laws are also subject to testing and recalibration to protect the interest of all the relevant stakeholders of the industry,» he added.