India sees spike in crypto exchange sign-ups, but could it be premature
It’s been a time of celebration for India since the annual Budget announcement brought some clarity to the status of crypto in the country. This came after months of bated breath and fears of a blanket crypto ban.
That said, is it time yet for Indian investors to let down their guard?
A big fat Indian party
As soon as the news broke that the transfer of digital assets would attract a tax of 30% from 2023, there was jubilation as many Indian investors assumed this meant crypto had been legalized.
Now, the Indian media is reporting a spike in user sign-ups for Indian crypto-exchanges such as WazirX, CoinSwitch Kuber, and Unocoin. WazirX CEO Nischal Shetty told The Economic Times that the exchange saw more than a 50% increase in sign-ups a day after the Budget announcement. Other exchanges also saw a rise in sign-ups, but noted that factors such as their own promotions could be the cause of the same.
However, there are several caveats. First and foremost, India is still very far from recognizing crypto as legal tender. Next, it remains to be seen how the government will support investors who face losses while trading in digital assets, as these cannot be set off. What’s more, there is a dearth of known crypto-experts or stakeholders who are publicly taking part in these discussions.
Even so, the Budget might have played a significant role in giving more investors the confidence to begin crypto-trading. According to a joint survey by Times of India and Deloitte, one which questioned 1,800 respondents, 55.2% said they would go on investing in crypto. However, here’s the clincher – Another 26.8% said they would join if there was more regulatory clarity.
It’s arguable that clearer guidelines surrounding the taxation of digital assets will encourage many potential investors to finally dip their toes into crypto-trading.
Eat, Pay, Love
While many of the tax rules will come into force in 2023, how does the Indian administration feel about the asset class? Speaking to Bloomberg, India’s Finance Secretary, T.V. Somanathan pointed out that crypto-assets are not “illegal,” but not “encouraged.”
Indian investors should also note that Somanathan went on to compare crypto-assets to winnings from bets and horse races.