The recently-proposed crypto regulations are harboring attention as DeFi companies reach out to the finance ministry. The firms seek more clarity on the regulations, propositions, and effects.
Most of these firms revolve around offering interest on crypto-insurance, loans, and deposits. The primary concern of the firms is to stay clear of the regulations’ imposition. Since DeFi acts as a decentralized financial framework built using blockchain, it allows users to remit money, buy insurance, and even borrow funds using crypto as collateral.
The industry virtually emulates brokerages, banks, insurance firms, and other financial products. With such close association with the crypto market, the DeFi market naturally feels threatened by the latest guidelines.
Unlike crypto exchanges, the number of DeFi service providers is limited in India. However, the ones offering the services have close ties with cooperative societies to promote the solutions. Some companies even plan on launching regional branches and ATMs to offer their services.
Kumar Gaurav, Chief Executive and Founder of Cashaa talked about the recent development. According to Gaurav, Cashaa is interacting with state registrars and the finance ministry to formulate the best path. As a result, it seems like cryptocurrencies are allowed as an asset class. Once the currencies are regulated, Cashaa will add more cooperative features to its network.
The London-based crypto firm has ties with the United Multistate Credit Cooperative Society. The ventures recently launched UNICAS, the first crypto-friendly financial platform with offline operations and branches.
The latest proposition by the government also has NFT projects on their toes. Since the government can categorize NFTs as commodities, the regulations also pose a threat to the sector.
DeFi and even crypto are in their early stage in India, so facing such roadblocks is natural. However, it remains to see how the finance ministry treats NFTs and DeFi projects according to the proposed guidelines.