Tuesday, August 16

India Reflects On Crypto Across China, Nov 22-29

Are large emerging economies more likely to lean towards blanket crypto bans? China has set a precedent, and it now appears that India could be weighing a similar political direction: A bill containing a proposed ban on all “private cryptocurrencies” will be submitted to the nation’s parliament sometime this winter. The move is designed to clear the way for India’s central bank to advance its digital currency agenda. Whether a sovereign central bank digital currency can coexist with a thriving ‘private’ crypto market will be one of the central questions of the impending CBDC era, and it is clear that governments will be tempted to use their coercive authority to tilt the playing field. in favor of the centralized money they control.

Below is the concise version of the latest “Law Decoded” newsletter. For the full breakdown of policy developments over the last week, sign up for the full newsletter below.

Lok Sabha to consider policy options

One of the 26 new bills that the Lok Sabha, the lower house of the Indian parliament, will take on during the winter session starting this week is the Official Cryptocurrency and Digital Currency Regulation Bill. The document outlines a set of measures aimed at facilitating the creation of a CBDC, including a proposed ban on all “private” digital assets, with a few exceptions. The exact implications of the legislation remain the subject of much speculation, with analysts offering divergent interpretations of the scope of the possible ban. However, the market responded in a more consolidated way, as cryptocurrency prices on leading Indian exchange WazirX plummeted on the news.

Powell to stay, Omarova in the air

United States President Joe Biden nominated Jerome Powell, the current Chairman of the Board of Governors of the Federal Reserve System, for another four-year term as head of the Federal Reserve. During one of his recent appearances in front of Congress, Powell stated that a blanket ban on China-style cryptocurrencies was not in the cards, but said that stablecoins needed more regulatory oversight. During Powell’s current term, set to expire in February 2022, the Federal Reserve has been actively exploring the possibility of issuing a CBDC, as well as partnering with federal regulatory agencies for crypto-focused “policy sprints” aimed at Identify and remedy gaps in the regulation of digital assets.

South Korea’s NFT Policy

Taxes on cryptocurrencies remain a hot political issue in South Korea, as the government is sending mixed signals on whether the new rules, including a 20% tax on cryptocurrency income, will go into effect as of January 1. January 2022. Falling under the updated tax code is still murky too. While the nation’s Financial Services Commission had previously stated that non-fungible tokens, or NFTs, are tax-exempt, the agency’s chairman stated the exact opposite last week. Additionally, the regulator has put forth a set of strict reporting requirements for digital token issuers, with prescribed jail time for those who do not comply.