Trade cryptos? Exchanges are facing payment issues; Know what the problem is
Cryptocurrencies, such as Bitcoin, Ether, and Matic, have become a hot topic in the country as they have generated huge profits lately. However, its extremely volatile nature and gray regulatory status has always worried demand, investors. Now, the supply side, or exchanges, are facing funding issues, which is hurting cryptocurrency trading.
Recently, crypto exchange Coinbase halted rupee transfers to its trading app via UPI, as the National Payments Corporation of India (NPCI) said earlier that it was “unaware” of an exchange. crypto using its payment network, according to an ET report.
“We are committed to working with the NPCI and other relevant authorities to ensure we are aligned with local expectations and industry standards,” a Coinbase spokesperson said in a statement to Bloomberg.
Besides Coinbase, four other crypto trading companies have either suspended rupee deposits or seen banks and payment gateways withdraw support for money transfers on their platforms, according to the ET report.
The 2022 Union Budget proposed a 30% tax on profits from the sale of all crypto assets, with a 1% withholding tax on all such transactions. The new rules became applicable from April 1. A new Section 115BBH was inserted into the Income Tax Act 1961 to tax virtual digital assets. The rules also state that the loss resulting from a digital asset cannot be carried over to the following year.
In the absence of any law regulating cryptocurrencies, the legal status of these assets is unclear at this time. After the Union budget tax proposal on cryptocurrencies, investors said the provisions effectively legalized crypto trading. However, Finance Minister Nirmala Sitharaman said taxing cryptocurrencies does not mean they have been legalized. The matter is still under review.
Also in Rajya Sabha, the finance minister said the Center will decide whether or not to ban cryptocurrency later, but transaction taxation does not legitimize it.
In February, during a press conference, Sitharaman had said that the government and the Reserve Bank of India (RBI) were “on board” with regard to the treatment of cryptocurrencies and said that discussions were ongoing. on the regulatory treatment of these digital virtual assets. .
She had said: “We are all talking before the budget, the discussion continues and we will continue to have discussions. All the decisions that have been made on this, obviously it’s very serious, it’s a central bank digital currency of a certain description, so obviously with more care after having had consultations.”
Sitharaman also said the government would indicate its position on cryptocurrencies after completing the ongoing consultation process. In the past, the Reserve Bank of India has warned people against investing in cryptocurrencies.
Referring to a speculative bubble that gripped the Netherlands in the 17th century, RBI Governor Shanktikanta Das said these digital assets don’t even have the underlying value of a tulip.
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