The leading cryptocurrency exchanges in India including, CoinswitchKuber, WazirX, and CoindDCX, have teamed up with the Internet and Mobile Association of India(IAMAI) to make a regulatory and advisory body to follow a code of conduct for cryptocurrency trade in India. India’s cryptocurrency industry has faced many roadblocks since the beginning. However, the trading market has been steadily growing and has reached close to 1.5 crore investors and traders since the start, with millions more joining each month. However, with the recent trouble of banks disassociating themselves from any sort of cryptocurrency trade and applications, the trader community has suffered a lot.
Implementing an advisory platform took up pace after The Reserve Bank of India specified that banks could not cite the example of the 2018 circular to penalize its consumers for being active members of the cryptocurrency trading community in India. Insiders aware of these matters have reported that all the major cryptocurrency trading applications have partnered to ensure regulated and linear performing assets and so that there is no hindrance by the banking and finance personnel. The board is likely to be set up on a blockchain network and will function as a self-regulatory authority for the trade sector focusing on cryptocurrency trades.
The process for implementing this authority has been ongoing since last year, and it will cover surprise audits, KYC details updating from time to time, routine disclosure on funding of businesses, improved and regulated data storage, and will work on minimizing the risks associated with the trade. In addition, the advisory body will work together along with RBI and Financial Intelligence Unit (FIU) to flag out suspected transactions and inspect them thoroughly.
Several challenges will require to be addressed to maintain the committee as there are multiple factors involved in the trade, like over 50 registered trading applications that facilitate the business of over 15,000 crores per year. In addition, interest in the cryptocurrency trading industry has increased manyfold over the last year, bringing many new traders and investors to the trade.
Cryptocurrency is a difficult digital currency to manage, as multiple levels of KYC, anti-theft, anti-terrorism measures are required before one can start a smooth functioning trade. According to reports, many small banks do not have the infrastructure to support the supervisory assessments. It is still to be seen how and when the regulatory authority comes into play and when the turmoil in the cryptocurrency trade in India is likely to end as the market continues to fluctuate, leaving traders devastated.