At the time of writing, the cryptocurrency is no Legal tender in India. In fact, a bill regulating cryptocurrency and official digital currency was prepared last year. This bill would make all private cryptocurrencies nationwide illegal. Although it “allows” certain “exceptions” that can help advance the “core crypto technology.”
So far, the bill has not been introduced by the Indian government, with some reports suggesting that it would prefer to regulate the sector entirely instead. Ajay Seth, Minister of Economic Affairs, confirmed that the government is “fully prepared” to release its advisory paper on the cryptocurrency landscape. Seth insisted that the Indian government is keen to reach a global consensus on cryptocurrency before the country can impose an effective regulatory framework.
Are government crypto taxes good or bad news?
In the absence of a strong regulatory framework, Indians are free to trade cryptocurrencies on major exchanges. However, the government recently imposed a 30% tax on cryptocurrency investments, as well as any other “virtual digital assets” such as non-fungible tokens (NFTs). Additionally, intraday cryptocurrency traders will be exposed to a 1% withholding tax (TDS) on transactions that exceed a certain threshold.
While this may seem like a punitive measure to some, it is also encouraging news for crypto enthusiasts in the Indian subcontinent. Those who are positive about the future of cryptocurrency and blockchain technology in India believe that the fee is a sign of the government’s official acceptance of crypto assets as an alternative financial tool in India.
This, combined with the lack of a regulatory framework, has allowed many industries to start adopting cryptocurrency as a legitimate payment method. In fact, an increasing number of major brands in India have started accepting bitcoin transactions.
In e-commerce, the Indian platform HighKart has enabled bitcoin payments to purchase goods and services through its portal. HighKart, which was established in 2013 during the e-commerce “boom” era, has become the first online retail marketplace to accept BTC in India.
The Indian iGaming industry has also taken an innovative approach to cryptocurrency. In fact, some operators are preparing to launch dedicated Bitcoin casinos online. Crypto casino Metaspins is set to open its doors online soon, allowing its customers to bet and win classic table games and online slot games exclusively in cryptocurrencies such as Bitcoin. In fact, the site is said to be incubating deposits in no less than 11 cryptocurrencies, with deposits and bets in Ethereum (ETH), Ripple (XRP), Cardano (ADA) and even the infamous “meme coin.” (DOGE) all welcomed.
Indian developers have even jumped on the cryptocurrency trading bandwagon. Unocoin was launched in 2013 as India’s “Most Trusted Crypto Exchange” for locals. Since then, it has served more than 2.3 million users and processed nearly 22 million transactions.
India is a country that is increasingly passionate about cryptocurrency
In fact, according to the Times of India, there are between 15 and 20 million Indian investors in the cryptocurrency space. Its report states that India is now home to the highest concentration of cryptocurrency owners on the planet. It also revealed that nearly two-thirds (60%) of Indian states are now considered “CryptoTech users”. It is true that India’s tech ecosystem is currently one of the most vibrant on the planet. There is a growing pool of talent enthusiastic about crypto technology and blockchain in particular. For India to position itself at the forefront of the global blockchain space, it will take a renewed effort from key institutions and regulators to embrace change while protecting the best interests of the general public.
Within the next twelve months, the Reserve Bank of India (RBI) is expected to launch a digital currency backed by the central bank. The “Digital Rupee” will be an important testing ground, demonstrating the potential of cryptocurrencies as a positive force to improve the efficiency of payment systems. In addition, centrally backed “sovereign” cryptocurrencies will be viewed as a safer starting point than other cryptocurrencies with more volatile value.
For cryptocurrency to hit the mainstream in India, the digital rupee needs to be launched. It will also require millennials and Gen Z citizens to take action and jump on the crypto and blockchain bandwagon. The Times of India reports that women’s participation in cryptocurrency has already increased by more than 1,000% in the past few years. Meanwhile, two-thirds of active users (66%) are between 18 and 34 years old.