At the time of writing, cryptocurrency is not legal tender in India. In fact, last year saw the Cryptocurrency and Regulation of Official Digital Currency Bill prepared. This bill would make all private cryptocurrencies illegal nationwide. Although it does “allow” for “certain exceptions” that could help to promote the “underlying technology of cryptocurrency”.
As yet, the bill has not been tabled by the Indian government, with some reports suggesting it would prefer to fully regulate the sector instead. Ajay Seth, Economic Affairs Secretary, confirmed the government was “fairly ready” to publish its consultation paper on the crypto landscape. Seth insisted the Indian government was keen for a global consensus to be achieved on cryptocurrency before the country could enforce a successful regulatory framework.
Are government levies on crypto good or bad news?
Given the lack of a robust regulatory framework, Indians are free to trade cryptocurrency at the leading exchanges. However, the government has recently levied a 30% tax on cryptocurrency investments, as well as any other “virtual digital asset” such as non-fungible tokens (NFTs). Furthermore, intra-day traders of cryptocurrency would also be hit with a 1% tax deduction at source (TDS) of trades above a set threshold.
Although this might sound like a punitive measure to some, it’s also encouraging news for crypto enthusiasts on the subcontinent. Those positive about the future of cryptocurrency and blockchain technology in India believe these levies are a sign of the government’s formal acceptance of cryptoassets as an alternative financial instrument to invest in.
This, combined with the lack of regulatory framework, has enabled several sectors to begin embracing cryptocurrency as a legitimate form of payment. In fact, a growing number of major brands in India are starting to accept Bitcoin transactions.
In e-commerce, Indian platform HighKart permitted Bitcoin payments for the purchase of goods and services throughout its portal. HighKart, which was established in 2013 around the time of the e-commerce “boom”, became the first online retail marketplace to accept BTC in India.
The Indian iGaming industry has also taken an innovative approach to cryptocurrency. In fact, there are some operators preparing to launch dedicated Bitcoin online casinos. Metaspins crypto casino is due to open its doors imminently online, allowing its customers to bet and win on classic table games and online slot games exclusively in cryptocurrencies like Bitcoin. In fact, the site is said to be embracing deposits in no less than 11 cryptocurrencies, with deposits and wagers in Ethereum (ETH), Ripple (XRP), Cardano (ADA) and even the famed “meme coin” Dogecoin (DOGE) all welcomed.
Indian developers have even jumped on the crypto trading bandwagon. Unocoin was launched in 2013 as India’s “most trusted crypto exchange” for locals. Since then, it has served over 2.3 million users and processed almost 22 million transactions.
India is a nation increasingly passionate about cryptocurrency
In fact, according to the Times of India, there are anywhere between 15 and 20 million Indian investors in cryptocurrency. Its report states that India is now home to the highest concentration of cryptocurrency owners on the planet. It also revealed that almost two-thirds (60%) of Indian states are now considered “CryptoTech adopters”. It’s true that India’s tech ecosystem is one of the most vibrant on the planet at present. There is a growing talent pool passionate about crypto and blockchain technology in particular. For India to cement itself at the forefront of the global blockchain space, it’s going to require a renewed effort from traditional institutions and regulators to embrace change while protecting the best interests of the public at large.
In the next 12 months, the Reserve Bank of India (RBI) is set to launch a central bank-backed digital currency. A “digital rupee” would be an important proving ground, demonstrating the potential for cryptocurrencies as a force for good in driving efficiencies within payment systems. Furthermore, central-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 hit the mainstream well and truly in India it will require the digital rupee to hit the ground running. It will also need millennial and Gen Z citizens to act and hop aboard the crypto and blockchain bandwagon. The Times of India state that female participation in crypto has already risen by more than 1,000% in the last few years. Meanwhile, two-thirds (66%) of active users are aged 18-34 years of age.
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