The continuous debate over the regularization of cryptocurrencies in India has been running since long, with both the finance ministry and Reserve Bank of India (RBI) mulling on the future course of action. The much awaited crypto bill that was meant to bring greater clarity on crypto regulation was expected to reach the Parliamentary table during the winter session but now it is floating in the cabinet for approval. The same bill was also listed for the budget session of 2021 but it did not get to the discussion round that time as well.
Prime Minister Narendra Modi earlier also held a meeting to discuss concerns related to cryptocurrency and at the Sydney Dialogue appealed that democratic nations must come together to ensure cryptocurrency does not end up in the wrong hands. The RBI on several occasions has also highlighted that it feels cryptocurrencies like Bitcoin may pose a risk to financial stability and also questioned its claims of market value.
The Supreme Court last year, however, nullified the RBI circular banning cryptocurrencies. It also set aside an RBI circular of April 6, 2018, prohibiting banks and entities regulated by it from providing services with connection to virtual currencies in March this year.
With a lot going around in the crypto space ever since in the India market; several studies from research firms like Watcher Guru and BrokerChoose have revealed that India has the highest number of crypto investors in the world, the number is around 100 million. Coming to the price fluctuations, the most successful, yet unstable digital currency would definitely be Bitcoin. Considered to be the most popular cryptocurrency, Bitcoin’s lowest traded price was $25,987 while it reached its peak price of $68,789 in 2021, says data compiled from coinmarketcap.com.
This uncertainty in the crypto market at a time when the investments are at their peak has impacted companies foraying into the crypto space. Now all eyes are on the upcoming Union Budget where the Indian crypto industry is expecting a favourable crypto bill which will help develop an effective ecosystem for the most hyped digital assets in the world. The industry however is optimistic about the future and expects the upcoming Union Budget to bring in regulatory clarity with respect to cryptocurrencies.
Let’s hear from the experts what their expectations on the crypto regulations are in the upcoming Union Budget 2022.
“While the Indian crypto ecosystem eagerly awaits the government’s decision to regulate crypto assets through the crypto bill, in the Union Budget 2022 we can expect the government to provide their initial views on crypto. This could include information on income or capital gains, taxation, and other certain views they have on crypto assets. However, nothing can be firmly stated until the crypto bill is released, as that would be the basis on which crypto assets will have a definition in India. Furthermore, we expect to see a boom in Indian crypto start-ups as the industry is growing massively. We are seeing many Indian and foreign VCs being intrigued with crypto companies and the talent they have. With this degree of growth, we hope the government takes a positive regulatory stance in regulating crypto assets.” – Roshan Aslam, Co-Founder & CEO at GoSats
“Various macroeconomic developments in India and the world over the last year have led to a rise in crypto adoption in India. Today, leading crypto exchanges follow strict self-regulatory practices to ensure customer protection. We hope the upcoming Union Budget will bring in regulatory clarity and help standardize best practices, address misconceptions around this emerging asset class. We believe a regularized environment will encourage more Indians to start their crypto investing journey, promoting financial inclusion in line with the government’s vision.’’ – Sharan Nair, Chief Business Officer, CoinSwitch Kuber
“Crypto technology and blockchain are long-term phenomena that are not going away. And as the government regulations focus on protecting its constituency from the bad it does, it should also look towards utilizing its power of good for better governance and accountability. India has been a significant player in developing solutions for the rest of the world with modern technology; it is high time we become a model of utilizing it ourselves. The Union budget should include more resources to make our cities into more efficient, better governed, smart cities. We can create models in infinite ways, from more robust policing to e-voting, to more efficient ways to provide public services leveraging blockchain. The Union budget can aspire to not only reflect the value these services deliver day-to-day but to audit, be accountable, and find ways to provide a ground swell in adoption of blockchain technology in the meat and bones of the largest democracy in the world.” – Pratik Gauri, Co-founder & CEO, 5ire
“With the pandemic, technology has become an integral part of all supply chains. Technology-driven start-ups are a key contributor to the country’s GDP, employment, and social goals. India is also one of the biggest bases of the crypto and blockchain technology users. We believe compliance and growth go hand in hand. Given the fact that the marketplace for digital assets and services expanded manifolds within the country, we are hopeful the government will bring clarity on regulations around blockchain technology. We are optimistic that policies that come in play will further increase the ease of doing business in India and make the country a leader in a futuristic industry.” – Toshendra Sharma, Founder and CEO, NFTically
“When it comes to cryptos, I am not expecting anything amazing to come out of budget this time. If at all, the income tax confusions may get cleared up. This is not the time to propose new regulations.” – Sathvik Vishwanath, Co-Founder & CEO, Unocoin
“At a time when the nascent yet rapidly-growing crypto industry in India is tiding through a lot of uncertainty and volatility, the upcoming Union Budget should focus majorly on regulating the sector by classifying cryptocurrencies as an asset class for India and providing regulatory clarity in terms of tax applications for them. Furthermore, the roll-out of a comprehensive self-regulatory body or group for and of the cryptocurrency and blockchain sector players can also be considered by the Government – which in turn is bound to give a boost to the realization of its vision of ‘Digital India’ without crypto being seen as a threat to existing financial and banking structure of our country. Once the Government steps in to implement a standardized regulatory framework for the crypto and blockchain sectors, I believe it will allow many more opportunities and use cases to be explored and unlocked at scale by India Inc. as well as startups and individuals exploring this segment.” – Om Malviya, President, Tezos India