NEW DELHI: The United States Securities and Exchange Commission’s (SEC) approval for the listings of the exchange traded funds (ETFs) to track bitcoin is being seen as a historic moment for the world’s most popular crypto asset to become a mainline currency. However, for crypto players in India, who are celebrating the long-battled development in the world’s biggest capital market, a similar approval or acceptance remains a distant dream.
The local crypto stakeholders faced a reality check as the RBI Governor Shaktikanta Das on Thursday said the central bank does not “emulate” others when it comes to regulations. Das, who believes that cryptocurrencies can create huge risks for emerging markets, added that the bank’s as well as his opposition to the asset remain unchanged.
“The US capital markets regulator in the same announcement also issued necessary cautionary advice and necessary warning to investors to be careful along with the risks it poses. Our position, my position and the RBI’s position on this remain unchanged irrespective of who does what. Just because someone has done something, we are not here to emulate them,” said Das.
The RBI chief had previously called for a ban on cryptos and compared it to gambling. The local crypto market faced a big setback when the government introduced a 30% tax on crypto profits and 1% TDS on all transactions in July 2022.
Rajagopal Menon, vice-President, WazirX, said when it comes to India, everything boils down to regulations. “We must remember that regulatory discussions have been happening in the US for the last few years…We are yet to have this type of discussions in India. Things will change as India is a signatory to the G20 Delhi declaration which outlines of regulatory road map,” said Menon.
Avinash Shekhar, CEO of Pi42, said that the optimism brought about by this move will augur well for the global crypto industry. “I am equally hopeful that this will also facilitate more discussions among the Indian ecosystem and very soon India will have its own crypto ETF,” said Shekhar.
The US SEC on Wednesday gave green signal to 11 ETFs for bitcoin in the US. Analysts at Standard Chartered said the ETFs could draw $50-$100 billion this year alone, driving the price of bitcoin as high as $100,000. Bitcoin prices have surged about 70% since October on expectation of ETF listings. Currently, the coin is trading at about $47,900-48,000 level.
Rajeev Bamra, SVP, of Digital Finance, Moody’s Investors Service (rating agency) said that the approval of spot bitcoin ETFs by the SEC has the potential to simplify and secure Bitcoin investments for a broader investor base, which may reshape the dynamics of cryptocurrency investments.
“In 2023, Bitcoin and Ether have made cryptocurrencies the best-performing asset class. Whether this trend will hold depends on the trajectory of global monetary policy-making as well as the availability of cryptocurrencies to institutional investors through products that meet regulatory standards, ensuring their safety and security,” added Bamra.