At the time of writing, cryptocurrency is not legal tender in India. Last year, the cryptocurrency law and official digital currency regulation were even drafted. This bill would make all private cryptocurrencies illegal across the country. Although it “allows” certain exceptions that could help promote the “underlying cryptocurrency technology”.
So far, the bill has not been introduced by the Indian government, and some reports suggest it would rather regulate the sector completely. Economic Affairs Secretary Ajay Seth has confirmed that the government is “pretty ready” to release its consultation paper on the crypto landscape. Seth insisted that the Indian government is keen to achieve a global consensus on cryptocurrency before the country can enforce an effective regulatory framework.
Are government crypto levies good or bad news?
Lacking 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 on all other “virtual digital assets” such as non-fungible tokens (NFTs). In addition, intraday cryptocurrency traders would also be hit with a 1% withholding tax (TDS) on transactions above a set threshold.
While this may seem like a punitive measure to some, it’s also encouraging news for crypto enthusiasts in the subcontinent. Those who are positive about the future of cryptocurrency and blockchain technology in India believe that these levies are a sign of the formal adoption by the government of crypto assets as an alternative financial instrument in India.
This, coupled with the lack of a regulatory framework, has allowed several industries to use cryptocurrency as a legitimate payment method. In fact, an increasing number of major brands in India are starting to accept Bitcoin transactions.
In e-commerce, the Indian platform HighKart has enabled bitcoin payments for the purchase of goods and services through its portal. Founded in 2013 during the era of the e-commerce “boom”, HighKart became the first online retail marketplace to accept BTC in India.
The Indian iGaming industry has also taken an innovative approach to cryptocurrency. Some operators are even preparing to launch dedicated Bitcoin online casinos. The Metaspins crypto casino will soon open its doors online, allowing its customers to bet and win on classic table games and online slot games, exclusively in cryptocurrencies such as Bitcoin. In fact, the site is said to embrace deposits in no less than 11 cryptocurrencies, with deposits and wagers in Ethereum (ETH), Ripple (XRP), Cardano (ADA) and even the infamous “meme coin” Dogecoin. (DOGE) all welcome.
Indian developers have even jumped on the crypto trading train. Unocoin was launched in 2013 as India’s “most trusted crypto exchange” for the locals. Since then, it has served more than 2.3 million users and processed nearly 22 million transactions.
India is an increasingly passionate country for cryptocurrency
In fact, according to the Times of India, there are between 15 and 20 million Indian cryptocurrency investors. The report states that India is now home to the highest concentration of cryptocurrency owners in the world. He also revealed that nearly two-thirds (60%) of Indian states are now considered “CryptoTech adopters”. It is true that India’s tech ecosystem is one of the most vibrant in the world right now. There is a growing pool of talent with a passion for crypto and blockchain technology in particular. If India is to position itself at the forefront of the global blockchain space, it will require a renewed effort from mainstream institutions and regulators to embrace change while protecting the interests of the general public.
Within the next 12 months, the Reserve Bank of India (RBI) is expected to launch a central bank-backed digital currency. A “digital rupee” would 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” digital currencies will be seen as a safer starting point than other altcoins with a more volatile store of value.
For cryptocurrency to truly become mainstream in India, the digital rupee needs to be launched. It also requires millennials and Gen Z citizens to take action and jump on the crypto and blockchain train. The Times of India states that women’s participation in crypto has already increased by more than 1000% in recent years. Meanwhile, two-thirds (66%) of active users are between the ages of 18 and 34.