Dubai becomes the hub of the cryptocurrency
Unmesh Gujarathi
Sprouts Exclusive
The cryptocurrency is a virtual currency. It is like digital currency and is an alternative to actual currency. But crypto is not like the Indian rupee, American dollar, or British Pound Sterling.
No Government prints this currency. It is available only online. The cryptocurrency is generated through mining and deals are through the black (grey) chain.
In India, the cryptocurrency is circulated with different names like VazirX, Jeb Pay, Coin DCS, Coin Switch, Bitcoin, Light Coin, Ripple and Ethereum and Z Cash. All the deals are online. That is the reason these transactions are unsafe. The RBI has no control over these companies.
The Union Government has alleged that the cryptocurrency is being used for money laundering and to fund terror activities. As such the Government of India banned crypto currency in 2018. However, the Supreme Court subsequently lifted that ban.
After that several Indian companies released bombarding advertisements in support of the cryptocurrency. These advertisements were misleading but due to the huge money involved the media houses accepted these ads and eventually lost their credibility. These ads influenced people to such an extent that the revenue of these companies grew in multiples.
After that, the Government of India decided to levy a 30 percent tax on the income earned through crypto transactions, in the annual budget for 2022-2023. In addition, the Government decided to deduct one percent from every transaction of cryptocurrency. This decision badly affected crypto transactions due to the possibility of every transaction being exposed with minute details. The decision has also shattered those involved in these transactions.
In addition, the Government of India has imposed many stringent restrictions on these companies. Besides, the Enforcement Directorate (ED) has frozen the deposits worth crores of rupees of VazirX. The action against VazirX was taken on charges of economic offenses and violation of Forex regulations. Besides VazirX, the ED has also served similar notices to other companies. Eventually, most of the companies wound up their shops.
Most of the companies have set up their base in Dubai. The Dubai authorities have set up a special ‘Bitcoin Hub’ for all such operators. Also, the Dubai authorities have begun issuing them official licenses. No tax is imposed and there are no restrictions. On the contrary, they are given certain facilities as well.
