[Enforcement Directorate](/topic/enforcement-directorate)(ED), the income tax department, and the Central Bureau of Investigation (CBI) with vital data on crypto assets.
The objective is to monitor and curb the use of
[cryptocurrencies](/topic/cryptocurrencies)in illegal activities like crime and money laundering.The goal is to augment the regulatory framework surrounding the [digital asset](/topic/digital-asset)market, which has often been likened to the Wild West due to its lack of oversight.The envisaged database will serve as a repository of critical information on [crypto exchanges](/topic/crypto-exchanges), aiding regulators in monitoring and ensuring compliance within the crypto sphere.
The Genesis of the Database
The goal of this ambitious project is to construct a centralized system capable of monitoring various elements of crypto transactions.The database will not limit itself to recording activity within India alone.Instead, it intends to include a raft of information from major international exchanges, such as Binance, Bybit, and Kucoin.By doing so, it will offer governments worldwide a panoramic view into the often opaque world of crypto asset transactions.
Detailed Oversight
View Details »
Did you Know?
SAP has launched a new enterprise on the Metaverse with the aim of accelerating cloud adoption among Indian firms.The interactive and immersive ‘cloud on wheels’ platform will enable customers to experience the full range of SAP’s offerings and reimagine processes for improved business outcomes.
Battling Financial Crimes
The Future of Decentralized Wallets
So, what does this mean for decentralized wallets like MetaMask and TrustWallet, which have built their reputation on user anonymity? According to recent buzz, even these bastions of privacy might have to adapt to the new regulatory environment.KYC procedures may become mandatory for every wallet address.
While this could curtail some of the decentralized spirit that the crypto community values, it would also serve the greater goal of reducing financial crime.
Imminent Implementation
The government plans to have the database operational by the end of this fiscal year.
Accountability and Penalties
Those who fail to adapt to these changes face serious consequences.Tax evasion, for instance, will not only entail back taxes but also additional financial penalties.With the implementation of this database, transparency will no longer be an elective; it will be obligatory.
The objective of this exercise seems to be very grand in scale.Currently, most international exchanges provide information to Law Enforcement Agencies based on specific requests and court orders.It remains to be seen whether they will cooperate and share databases en masse.These exchanges could argue that they do not come under the purview of Indian jurisdiction and have no obligation to share data.How this is going to be tackled remains to be seen.
Project Atlas: similar objectives
These reports should not be viewed in isolation.Project Atlas, a prototype
[Bitcoin](/news/bitcoin)monitoring system, has been developed by the Bank for International Settlements (BIS).
This system aims to provide authorities with a clearer picture of cryptocurrency activities, both ‘on-chain’ and ‘off-chain’.The system aggregates data from publicly available crypto ledgers as well as harder-to-source data reported by some exchanges and users.While the data provides a rough picture of cryptocurrency activity, it’s not necessarily precise due to the anonymous nature of crypto wallets.The project seeks to map crypto transfers, which is seen as a monumental step towards demystifying the often opaque crypto transactions and bringing them under regulatory purview.
The Larger Picture
While immediate impacts focus on enhanced regulation and potential legal consequences, it is essential to see the broader implications.
The crypto exchange database project and project Atlas signify a massive transformation in the way the world could view and handle crypto assets.Both initiatives underscore the commitment of global financial watchdogs to instill a degree of transparency and accountability in the crypto domain.It will not only change how transactions occur but may also influence the evolution of cryptocurrency as a legitimate financial asset.
[www.economictimes.com](//economictimes.indiatimes.com/).) [Print Edition](/print_edition)Saturday, 28 Oct, 2023
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[Learn more about our print editionMore](/print_edition) [RIL Posts 29.7% Jump in Q2 Net Profit to ₹19,878cr](/epaper/delhicapital/2023/oct/28/satet-front/ril-posts-29-7-jump-in-q2-net-profit-to-19878cr/articleshow/104765220.cms)
Reliance Industries Ltd (RIL), India’s biggest company by market capitalization, reported a 29.7% increase in consolidated net profit for the July-September quarter on account of higher sales and the robust overall performance of its businesses.
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