By Edul Patel
Cryptocurrencies are the latest trend that is talked about all across the world in the current scenario. Even though crypto assets are unregulated, their popularity has increased day by day in India. Various estimates suggest nearly 15-20 million cryptocurrency investors with total crypto holdings of above $ 5 billion. These numbers show the vast amount of interest among the traders. With a rapidly-growing investor base, several crypto unicorns have been emerging. Estimates also highlight the possible contribution of digital assets at $1.1 trillion by 2032.
India’s crypto ecosystem is eagerly waiting for the upcoming budget session to hear on the new crypto bill. But, the crypto policy can get a mention or more. Or on the other hand, the Government may avoid mentioning it too, taking more time to get clarity on the introduction and implementation of the bill. As of now, the Government is expected to introduce a crypto bill in the upcoming Budget Session of the Parliament. With regard to the bill, the crypto industry is looking for a few essential things to be considered in the forthcoming budget.
All crypto players’ eyes are now on seeking clarity over the taxation aspects as there is no or very little clarity regarding the taxation of crypto earnings. There are several genuine concerns about the taxation of cryptos, such as its applicable tax rates, classification, TDS/TCS, and GST implications on the sale and purchase of cryptos. So, the crypto industry expects to bring a specific provision for crypto taxation. Since the Government has earlier stated that they might be classifying cryptocurrencies based on the use cases, it would be helpful with the taxation aspect. A forward-looking tax regime can encourage and boost innovations in the sector.
The one significant aspect that hinders the growth of crypto is the regulations. The regulatory body should not overlook both the cryptocurrency and the blockchain players. So the crypto spectrum is looking for progressive regulatory guidelines keeping in mind the increasing number of stakeholders. Under SEBI’s oversight, recognizing cryptocurrencies as a legitimate tradable asset would also bring more stability. And encouraging public-ledger-based crypto-assets to be registered for trading will also lead to great competitiveness. Considering these aspects in the upcoming budget can encourage Indians to start their crypto journeys, driving our Digital India and $5 trillion economy vision.
Blockchain these days serves the purpose of verifying and tracing multiple transactions easily. It would also be great if the Government could create administrative models to leverage blockchain. Adopting blockchain can help make our cities way smarter and technology-driven by securing the transactions, reducing costs, and speeding up data transfer processing.
Previous budgets have been towards financial inclusion, but this budget is crucial for the country’s economic development by employing new tools and technologies. Progressive regulations clarity on the taxation can strengthen faster transactions achieving greater transparency. The year 2022 can be an excellent year for the crypto industry, hoping to bring clarity and confidence on taxation, regulation, and classification at the earliest.
(The author is Co-Founder of Mudrex. Views expressed are his own.)
(Cryptocurrencies are unregulated assets in India. Please consult your financial advisor before making any investment decision)