Jai Sahu
The RBI maintains its warning about cryptocurrencies, even though the US SEC has recently given approval for Bitcoin spot ETF trading.
Finance Minister Nirmala Sitharaman did not address cryptocurrency regulations and taxes in her Interim Budget speech on February 1. India continues to collaborate with G20 nations to establish a unified global regulatory framework, aligning with the ministry’s perspective.
The Indian government has engaged in discussions with the crypto industry and taken measures to address some of its concerns. In December, it issued show-cause notices to offshore crypto exchanges like Binance and Kucoin. These notices were prompted by their non-compliance with local anti-money laundering laws and lack of registration in the country.
Consequently, certain Indian retail crypto investors turned to offshore exchanges to avoid the 30 percent virtual digital asset (VDA) tax and the 1 percent TDS imposed on crypto transactions exceeding Rs 10,000. The government took further action by making Binance, Kucoin, and seven other exchanges delist from the Apple App Store and later blocking access to their websites in India.
Although the crypto industry had limited expectations from this interim budget, given its nature as a prelude to the 2024 elections, they had advocated for stricter regulations on offshore exchanges and reiterated their demand for tax rationalization.
Referring to information from blockchain analysis company Chainalysis, the BWA noted that India stands at the forefront of widespread cryptocurrency adoption worldwide and secures the second position in global rankings for total transaction volumes in 2023.
Expressing a sense of dissatisfaction, Gaurav Mehta, the founder of Catax, acknowledges the challenges and opportunities tied to the Indian government’s current stance on crypto regulation and taxation. He expresses disappointment that the government did not address crypto matters in the budget.
Mehta emphasizes the pressing need for collaboration between the crypto industry and regulators, underlining the importance of clear regulations and tax rationalization. He stresses that these measures are critical not only for fostering innovation and ensuring investor protection but also for creating a compliant and growth-oriented crypto ecosystem in India, a perspective that aligns with Catax’s unwavering commitment to these objectives.