In the wake of China’s blanket ban on cryptocurrency transactions, the government’s cautious stance, and the long-awaited announcement of the official cryptocurrency bill to be tabled in the upcoming winter session of parliament, we examine a dreadful scenario in the case of cryptocurrency de-legalization in India.
It’s worth noting that, despite not having prohibited cryptocurrency, India still lacks legislation to regulate it. The Indian government is organising a new committee to consider the tax consequences of the country’s rapidly rising cryptocurrency trading.
Cities in Tiers 2 and 3 are gaining traction. According to reports, more than 15 million Indians have put their money in this account.
“Various estimates suggest that over the past twelve months, more than 15 million Indians have invested in cryptocurrencies. It is currently growing at a steady pace, with huge participation coming from tier-2 and tier-3 cities of India. Cryptocurrencies are much more than volatile digital currencies. They are an asset class that provides much-needed diversification to the portfolio of any investor. Taking cues from the Chinese approach to impose a blanket ban on cryptocurrencies would surely be a massive blow to the Indian economy,” says Edul Patel, CEO & Co-founder of Mudrex,
Nischal Shetty, Founder, and CEO, WazirX, adds, “Our number of users from Tier-II and Tier-III cities have grown by 2648% and contributed to 55% of total signups on WazirX in 2021. Crypto has immense potential to contribute to our $5 Trillion economy vision, given that more than 60% of states in India are emerging as CryptoTech adopters.”
The enormous potential for job development
According to a recent Nasscom-WazirX analysis, the crypto tech industry in India might add 184 billion dollars to the economy by 2030, rising to 241 million dollars in the following nine years. By 2030, the sector, which presently employs 50,000 people, has the potential to double in size and produce more than 800,000 employment in the country.
“Several cryptocurrency-based firms in India have raised millions of dollars in funding over the last year. Thousands of employment have been created by these businesses. According to various advertisements on sites like Naukri.com and LinkedIn, more than 20,000 individuals are now being hired in cryptocurrency and blockchain roles. If the government recognises cryptocurrency as an asset class, it will be taxed in accordance with the laws in effect. It might provide a significant boost to India’s finances.
“Imposing a ban on cryptocurrencies would mean that the government misses out on the opportunity to tax the gains on cryptocurrency trading. Finally, several cryptocurrency-based startups in India have many foreign investors. Banning cryptocurrencies would essentially mean that India loses out on a huge amount of FDI inflows. These inflows would otherwise have aided to reduce the deficit in India’s Balance of Payments,” Patel adds on it.
“The use of cryptocurrencies would also aid in the inflow of foreign investments from capital-rich countries searching for initiatives to fund in this industry. “We can accept cryptocurrencies in the same way that we embraced the internet, which offered millions of Indians the ability to express themselves and created new channels without upsetting the government’s oversight,” concludes Vikram Subburaj, Co-Founder and CEO of Giottus Cryptocurrency Exchange.