With Reforms, Crypto Can Be Next Big Thing: Rajarshi Mitra

Thiruvananthapuram: Following the recent ban on cryptocurrencies by the Reserve Bank of India (RBI), asking banks to shutdown operations of accounts dealing with Bitcoin and their ilk, the Supreme Court has commenced hearings on the matter. While the implications of the blanket ban amounts to the stifling of cryptocurrency business, the market participants remain hopeful of bouncing back. Destination Kerala spoke to Rajarshi Mitra, Head of Crypto Research, CoinLive, to understand the intricacies and scope of the cryptocurrency market in India.

With the recent ban on cryptocurrency by the RBI, what is the future of the virtual coins in the country?

The RBI ban has been in the talks for a long time and a lot of people were expecting it. The reason why it happened here is due to the large presence of scamsters in this space. Latest being the Raj Kundra Bitcoin scam. We need to weed out such elements and for that, there has to be stricter regulations in place to make the space cleaner. Having said that, I don’t think the RBI diktat is sustainable on a long-term basis.

Now that the ban is in place on cryptocurrencies, would it not affect the liquidity of cryptocurrencies in India?

Popular Bitcoin exchange platforms like Zebpay have already announced their inability to exchange the virtual currencies for the Rupee in India. Before the deadline ended, they had informed the users to liquidate their crypto assets; otherwise, to hold beyond the deadline.

And, yes, obviously people are looking into alternative options like sending their cryptocurrencies to their counterparts overseas for cash. However, remittance of cash against such quid pro quo moves could be subjected to taxman’s scrutiny. That is a different problem altogether. However, there are other options like trading currencies within the premises of crypto space and holding them, which is fully legal. So, at present, many cryptocurrency traders in India are holding stable coins considering it as an act of investment.

Coming back to the same problem, how would the crypto traders justify the liquidation process during tax audits?

Tax auditing is going to be an important issue right now. There needs to be a change in the existing scene so that it can be justified on papers. At present, Bitcoin users are expected to adhere to the existing rules under taxation. If there are capital gains from investment, the Bitcoin investor will have to pay capital gains tax. There has to be a system which enables the extreme mainstream adaptation of cryptocurrencies and that can happen only through self-regulation and discipline, creating the path to win the trust of the regulators.

Following an unprecedented surge in the value of Bitcoin a few months ago, it came down to almost half the value recently. How do you interpret this volatility?

Yes, it came down and it again surged and hovered above $7200 a couple of days ago. For the next 18 months, a lot of factors are going to influence the price of Bitcoin. However, I should point out that cryptocurrencies are working on certain scalability and privacy solutions. Absence of such factors so far was hindering the mainstream adaption of cryptocurrencies.

Being the crypto research head of CoinLive, what is the scale of acceptance cryptocurrency has been receiving from folks in Kerala?

Immense, I should say. I am a mentor at the Kerala Blockchain Academy and it is huge honour to me. I am looking forward to do more events with them. It is veryimportant to observe how people in crucial positions are embracing the changes. I can see that kind of dynamics only in Kerala.