NEW DELHI: As the government is formulating new bill to regulate cryptocurrencies, the Confederation of Indian Industries suggested that cryptocurrency or digital tokens should be treated as securities of a special class and a new set of regulations appropriate to the context should be evolved and applied.
It is also recommended to impose tax reporting requirements on participants who are investing or dealing in crypto assets (whether through a centralised crypto exchange or otherwise) through specific disclosures in income tax returns.
“To support this obligation, centralised exchanges may be required to maintain minimum capital and guarantee fund while complying with investor disclosure requirements which are prescribed by regulations from time to time, with respect to trading and investment risks,” it said.
It further said that the government should consider setting up a standing advisory council comprising representatives of regulators, policymakers, and other stakeholders who can advise on the challenges associated with the new asset class.
It had suggested that the centralised exchanges and custody providers that may be established in India, must be required to register with SEBI and to adhere to KYC and AML compliance requirements that apply to financial markets intermediaries, it said, adding they should be held legally accountable for the safekeeping of the digital tokens in digital wallets.