Union Budget 2022: Recognising Bitcoin, crypto as legitimate tradable assets would bring greater stability and trust to sector
Indian Union Budget 2022: File image of Finance Minister Nirmala Sitharaman. PTI
The Union Budget for the upcoming year comes at an interesting time. Amidst the increased adoption of Bitcoin and crypto in general, the past couple of years have seen a spectacular boom in Indian crypto startups building innovative products – not just for India, but for the whole world.
2021 was the year that India had its first crypto unicorns. As the industry continues to grow at an incredible pace, the sentiments in the sector are largely bullish. Several industry reports estimate how the potential for revenue from crypto and other digital assets is going to be massive. The crypto sector could potentially become a great source of FDI as well and help create thousands of jobs in the country.
Despite all of this positivity, there is still an overhanging apprehension within the industry – primarily due to the regulatory ambiguity around crypto. The government has yet to define crypto or provide concrete views on how crypto assets are going to be treated and taxed. At GoSats, we are looking at the Union Budget quite positively and expect that the government sees this as an opportunity to shed some clarity on this situation, and perhaps take the first steps towards a positive stance in regulating crypto assets.
During the Budget, we do not think there will be anything concrete regarding the treatment and taxation of crypto and other digital assets. For that, we will most likely have to wait until the crypto bill is released sometime later this year. However, what we are expecting are positive statements of intent from the FM – that could definitely help provide encouragement to investors and the sector as a whole.
The finance minister could officially acknowledge the potential of the crypto industry in the country and pave the way for its inclusion within the financial ecosystem with such positive statements of intent. The first positive step would be for the government to define crypto and at the very least, provide the government’s initial views on crypto including details on income or capital gains, taxation, etc.
Any such statements or plans for future initiatives announced in the Budget would also kickstart more conversation on understanding the sector, the taxation and other related policies required, and most importantly, the whole ocean of opportunities that India could capitalize on to become a leader in this sector. We are already seeing many Indian and foreign VCs being intrigued with crypto companies and the amazing talent they have. This would accelerate this trend, and open up thousands of job opportunities.
Although there isn’t any official data as such, a recent Reuters report pegged the number of cryptocurrency investors in India to be around Rs 1.5-2 crore, with a holding size of nearly Rs 40,000 crores. Recognising Bitcoin and crypto as legitimate tradable assets would bring in greater stability and trust to the sector.
This Budget does assume greater importance since as an economy we are staging a steady recovery while still fighting ongoing waves of the coronavirus pandemic. In the current climate, laying down the initial steps for forward-thinking regulation for cryptocurrencies could help play an important role in this recovery.
Regulatory clarity or approaches hinting towards the same would give the crypto sector a much-needed boost, accelerate its growth and contribute to the government’s $5-trillion economy vision while being a new tool amongst many others towards financial inclusion in the country.
At the end of the day, it seems to be in everyone’s best interests if the country moves towards a progressive regulatory framework around crypto. And we are of the hope that this happens sooner rather than later. The right statements and regulations would create a wonderful ecosystem where innovation can thrive – and India’s entrepreneurs can create platforms for the whole world, and encourage more Indians to kickstart their crypto journey and enjoy the benefits of wealth creation through Bitcoin, crypto, and other digital assets.
The author is CEO & Co-Founder, GoSats-bitcoin stacking platform. Views expressed are personal.
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