This week's Law Decoded: India ponders going full China on crypto

View this email in your browser India ponders going full China on crypto Nov. 22–29, 2021 Written by Beau Linighan   Editor's Note Are big emerging economies more likely to gravitate toward blanket crypto bans? China has set a precedent, and now it appears as if India could be weighing a similar policy direction: A bill containing a proposed ban on all "private cryptocurrencies" will go up in front of the nation's parliament sometime this winter. The measure is designed to clear the way for India's central bank to advance its digital currency agenda. Whether a sovereign central bank digital currency can coexist with a thriving market of "private" cryptos will be one of the central questions of the looming CBDC age, and it is clear that governments will be tempted to use their coercive authority to tilt the playing field in favor of the centralized money that they control. Still, even the biggest proponents of autocratic power should keep in mind that there are objective downsides to eliminating any and all crypto-related activity from a single nation's soil, especially when other jurisdictions do not follow suit. One vivid illustration is the United States, Kazakhstan and Russia strengthening their positions in the global Bitcoin hash power ranking because of China's abrupt exit. What it shows is that the global crypto marketplace suffers relatively little even when a single large player decides to opt out, and ultimately, it is the nation quitting the race that ends up disadvantaged. Lock Sabha to consider policy options One of the 26 new bills that the Lok Sabha, the lower chamber of the Indian parliament, will take on during the winter session that kicks off this week is called "The Cryptocurrency and Regulation of Official Digital Currency Bill." The document outlines a set of measures meant to facilitate the creation of a CBDC, including a proposed ban on all "private" digital assets, with a few exceptions. The exact implications of the legislation remain a subject of much speculation as analysts offered diverging interpretations of the scope of the potential ban. The market, however, responded in a more consolidated way as crypto prices on the major Indian exchange WazirX tanked on the news. The development follows a recent statement by Indian Prime Minister Narendra Modi, who argued that international cooperation was needed to ensure efficient crypto regulation, and some observers pointed out that the spirit of Modi's account suggested a more nuanced approach than an outright ban. Continue Reading Powell to remain, Omarova up in the air President Joe Biden nominated Jerome Powell, the current chair of the Federal Reserve System's Board of Governors, for another four-year term at the helm of the Fed. During one of his recent appearances in Congress, Powell has stated that a China-style blanket ban on crypto was not in the cards but said that stablecoins needed greater regulatory oversight. During Powell's current tenure, which is set to expire in February 2022, the Federal Reserve has been actively exploring the possibility of issuing a CBDC, as well as teaming up with federal regulatory agencies for crypto-focused "policy sprints" aimed at identifying and remedying gaps in digital asset regulation. The news has been generally well-received among the crypto-friendly segment of the U.S. political class, with Senator Pat Toomey voicing his support for Powell's next term as well as the nation's CBDC effort. Biden's pick for leading another financial regulator, the Office of the Comptroller of the Currency, is faring not so well. The nomination of Cornell law professor Saule Omarova, who is known for her anti-crypto stance, met resistance even from inside the president's own party. At least five Democratic senators have voiced their opposition to Omarova's candidacy, leaving the administration to decide whether to keep pushing the unpopular pick despite the pushback or withdraw the nomination. Continue Reading South Korean NFT politics Crypto taxation remains a hot-button political issue in South Korea as the government is sending mixed signals on whether new rules including a 20% tax on crypto income will go into effect starting Jan. 1, 2022. Which types of digital assets fall under the updated tax code remains murky as well. While the nation's Financial Services Commission had previously stated that nonfungible tokens are exempt from taxation, the agency's chairman stated exactly the opposite last week. Furthermore, the regulator has come forward with a set of strict reporting requirements for digital token issuers, with jail time prescribed for those who fail to comply. Continue Reading Further reads   Authorities in Finland imposed new rules on crypto marketing.   The European Union's planned framework for regulating cryptocurrencies has cleared another bar on the way to ratification.   The U.K. Law Commission determined that smart contracts fit within England and Wales' current legal framework, meaning that no statutory law reform is needed to accommodate them.   According to Ripple's CEO, the company's struggle with the SEC could come to an end in the coming year.   The head of the Australian Securities and Investments Commission admitted that the growing demand for crypto is impossible to ignore. Interested in the business behind blockchain and crypto? Subscribe to Crypt Biz 2 million people follow us on social media Download our official app:

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