Indian exchanges are planning to move abroad after RBI’s decision to ban crypto transactions
May 10, 2018 Posted / 157 Views
The decision taken by the Reserve Bank of India regarding the cryptocurrencies has left the Crypto market as well as the enthusiast in a state of shock. The Reserve Bank of India recently passed the regulation which it says that no regulated financial authority can have transactions with the cryptocurrency exchanges. Which has left the cryptocurrency exchanges devastated and now are trying to find out ways to thrive.
According to a report released by The Economic Times, the cryptocurrency exchanges of India like Zebpay, Unocoin, CoinSecure, BuyUcoin and BTCX India have decided to shift their headquarters from India to the Western countries of the United States like Singapore, Belarus, or Delaware.
Many of the exchanges have already taken steps and have spoken with the investors in order to discuss various tax structures.
The anxiety and nervousness caused in the cryptocurrency community in India are mainly due to the decision was taken by the Reserve Bank of India which has been a major blow to the cryptocurrency business in the country. It is to be noted that India is a country of 1.5 million investors who have, at some point in time, transacted with the cryptocurrencies.
In an interview with The Economic Times, Shivam Thakral, CEO, BuyUcoin, told
"We have to move our company to some foreign country where regulations allow opening of bank accounts plus we won't be dealing in fiat currency. It will become a global operation rather than an India-centric operation.”
The market professionals have calculated and have been observing that many of the cryptocurrency exchanges, despite moving their bases to other countries have been trying to develop products in order to serve the Indian market.
The companies have been given a three-month window by the Reserve Bank of India. Hence all the digital currency exchanges of India are settling the accounts of their users before they depart from the country, as reported by The Economic Times.
However on observing the pros of the decision. The cryptocurrency exchanges would not have to deal with the regulations imposed on them as they would be no longer a part of India. There is a concept in taxation called the permanent establishment which decides the jurisdiction which has the right to impose a tax on the company.
Riaz Thingna, Director, Grant Thornton Advisory, was of the opinion that,
"Even after such a move, Indian investors may be able to continue to invest with the platforms through innovative structures. Volumes from India will surely go down but profits from business originating from India may escape tax in India as the exchanges would not have a permanent establishment in India after the move.”
According to some of the tax experts the exchanges had only two options with them, either they would shut down their cryptocurrency exchanges or shift to some other country.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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