Cryptocurrencies have the potential to disrupt human life as we know it. It has evolved as a strong asset class while making giant strides towards becoming a designated “currency.”
Institutions, even countries, want to dig deep to capitalize on this asset class. India, with a population of 1.39 billion is riding the same wave as other regions across the globe, however, there is no certainty of a smooth sail.
In the latest development, the Indian government plans to lay down some strict regulations concerning the rising demand for crypto tokens. Apart from Bitcoin, Ethereum, or other known tokens, other shitcoins have surfaced this year. Ergo, giving rise to speculations and FUDs.
This could be one of the reasons why India wants to tighten regulation around cryptocurrencies by only allowing certain digital assets to be traded on crypto exchanges. A Reuters report highlighted this development incorporating two sources familiar with this discussion. One of the sources stated,
“Only when a coin has been approved by the government can it be traded, else holding or trading it in may attract a penalty.”
The government will allow only pre-approved tokens to be traded. This process is currently under discussion and also that the government plans to introduce and pass a law for the new asset class in the parliamentary session this month.
If approved, it will potentially create obstacles for thousands of peer-to-peer currencies that “thrive on being outside the ambit of regulatory scrutiny,” as quoted in the report. The report also added that hefty capital gains and other taxes may be levied to discourage cryptocurrency trading. A senior government source was quoted as saying,
” (Investors) will have to pay over 40% on any crypto gains so far…Additional goods and services sales taxes, and securities transaction taxes, could be levied on top of any capital gains taxes.”
Which means, even though a complete ban narrative wasn’t applicable here, major obstacles are bound to be there. Nonetheless, this falls in line with India’s Prime Minister Narendra Modi’s statement, encouraging regulations to ensure it didn’t “fall in wrong hands.”
Other prominent figures have put forward their opinions concerning this. Not so long ago, Reserve Bank of India Governor Shaktikanta Das raised caution to alert users. Instead, he spoke in favor of CBDCs. Furthermore, Rajeev Mantri, a leading venture capitalist saw no value or a motive for India to adopt crypto. He tweeted:
The crypto pumpers are yet to answer the question: “India wants crypto, but for what exactly?”
To wildly speculate in Shibu Coin or some other random shit coin pump and dump scheme? Some old tau sitting in Madhya Pradesh should invest his life savings here why exactly? https://t.co/i15LLCJfiw
— Rajeev Mantri (@RMantri) November 18, 2021
Nevertheless, crypto enthusiasts in the country remain undeterred from their pro-crypto stance. For instance, consider the tweet below.
This is India’s crypto moment. Come be a part of it 🔥 pic.twitter.com/8wdmEog0Sc
— Crypto India 🔑 (@CryptooIndia) November 3, 2021
Overall, whatever the result, the crypto-movement in India is certainly picking up. As a country that ranks second in the global crypto adoption index, it could become a major source of headwinds or tailwinds for the crypto industry.