The cryptocurrency craze is growing in India. Incidentally, in early 2020, the Supreme Court lifted the ban on this cryptocurrency. And since then cryptocurrencies have been in the spotlight. Then throughout 2021, interest in the cryptocurrency world began to grow as exchanges expanded and markets expanded.
Although India has entered the world of cryptocurrencies much later. However, India has welcomed the crypto world with open arms. And because of that, around 27 million Indians currently own crypto assets. This picture is mainly seen in tier 2 or tier 3 cities of the country.
In large countries like ours, there needs to be a lot of maintenance and regulation in the things in which people’s savings are invested. Because equity or mutual funds also require security and peace of mind. This is one area where India is perhaps lagging behind despite massive penetration in the last two years. I would like to remind you that understanding and acceptance of any good work is a natural cycle.
What steps has the central government taken in crypto?
Cryptocurrency is a very interesting coexistence of property, currency and technology. Observing the steps taken by the Finance Ministry so far reveals that our regulators look at the three aspects differently and I think that is the main reason why India has so far given mixed signals and taken time so that it can support emerging issues. It can also protect the interests of investors.
If we take a serious look at all the announcements made during the last Union Budget, it will be seen that most of the noise was around crypto taxation. But there is a very interesting thing around our government’s firm commitment to establish and promote Digital Rupee (a crypto version of INR).
Even this move is a welcome step which has since been reiterated by the Reserve Bank of India or RBI. Cryptocurrency on blockchain is generationally advanced compared to the current digital version of money and India is open to adopting a new technology that offers nothing but convenience.
The second aspect is that it is treated as an asset and is now well legitimized by the introduction of TDS and Income Tax. While it can be argued whether the rates are high (or low), or whether policymakers should look equally at the basis of STCG and LTCG, this should be a cause for celebration for the nascent industry.
Taxation is the regulator to approve cryptocurrencies and it is now clear that trading crypto for one is perfectly legal. Initially this is the picture and I am sure with time and increasing understanding, taxation will gradually become more investor friendly.
The third aspect is that our country’s regulators are very strict about cryptocurrencies. As a result, how cryptocurrencies fare in India and abroad needs to be carefully monitored. Apart from this we also need to ensure that we can take proper measures to control the inherent deficiency or problem i.e. loss of cryptocurrency.
In India and cryptocurrency and its future
Our Honorable Finance Minister last month talked about international cooperation in crypto. Like our neighbors Singapore and Dubai, India should not look back. These two countries are now leading the crypto revolution in the right direction. Crypto(s) exhibit a very interesting dual behavior where on the one hand it is visible to everyone, but on the other hand it is not obvious as the blockchain remains.
In my opinion the government should create frameworks, partner with exchanges and issue licenses so that companies like us (and others) can act as facilitators of what the regulators want and move India forward with blockchain technology.
There are pros and cons to all important and advanced work, and the job of time is to create accessibility with control over that matter so that we embrace all that is good and in no case miss out on the blockchain revolution. Because this will give a huge boost to our economy decades from now.
Crypto has received mixed reactions from various countries so far. El Salvador has become the first country to accept bitcoin as legal tender alongside the US dollar. However, it has caused extensive damage. Despite criticism from the International Monetary Fund (IMF) and several credit agencies, the Central American country continues to add BTC to its national reserves and has even revealed plans to set up a crypto trading hub called Bitcoin City. However, due to the recent decline in the price of BTC and the collapse of the overall crypto market, the investment in this country is losing value, estimated to be more than 50 million dollars.
On the other hand, you have the pattern of China, which has come down dramatically with the crypto platform and its various aspects. So much so that crypto traders and miners eventually had to move out of the country and set up bases in other South Asian countries to continue their business.
Perhaps India’s cautious approach to crypto and its various aspects can be considered a lesson for other governments to follow. Before deciding to adopt or ban cryptocurrencies outright without research, one should take a thoughtful step.