“Was Expected”: No Mention of Crypto in Indian Household Explained by Insiders

Nirmala Sitharaman, the Minister of Finance of India, skipped the topic of cryptocurrencies when she read out the Union budget for the 2023-2024 fiscal year on Wednesday, February 1st. Indians had pinned hopes for more clarity regarding crypto activities from this year’s Union budget announcement. However, industry insiders suspected the government could remain secretive about this next-gen fintech sector for a number of reasons.

India raised 30 percent Tax on all profits made from crypto trading and other related activities in the past year. Additionally, a percent TDS was charged on every crypto transaction so the government could manage to track these largely anonymous payments.

It has been less than a year since these crypto sector tax laws came into force in India, hence no changes to the existing system or new rules surrounding the sector have been announced today. Sathvik Vishwanath, the co-founder and CEO of crypto exchange Unocoin, shared this opinion with Gadgets 360.

“The government needs to have enough data for an extended period, say a year or two full fiscal years, to analyze and, if necessary, change it. Therefore, no significant news in the crypto industry was expected anyway,” Vishwakarma said.

The Uncoin Honcho also announced that his company has shared preliminary data on the type and number of transactions with the Indian government after the tax regimes were put in place.

Over the past year, both Indian crypto traders and industry players have pushed the Treasury is considering lowering the imposed taxes.

In December last year, India’s Industry Confederation BharatWeb3 had called the crypto tax “unfriendly” that was hampering the growth of the sector.

Despite constant repetition, this outcry from the crypto space did not unbalance the Treasury Department’s skeptical stance on the sector.

Today, FM Sitharaman’s tight-lipped stance towards the crypto industry left players quite disappointed.

Speaking to Gadgets 360, Rajagopal Menon, Vice President at the WazirX crypto exchangesaid the government needs to reconsider tax laws and give relief to the industry soon.

“There is continued uncertainty due to high taxes and a lack of solidity legal framework stifling progress in the industry. For the time being, trading volumes on the Indian stock exchanges could remain at the low point. We hope the government will reconsider its position on crypto taxes and work with the industry to create a regulatory framework that supports and encourages growth,” Menon noted.

On social media, many seem to have breathed a sigh of relief that FM Sitharaman has said nothing negative or alarming against the crypto industry.

After The fixed resentment of the RBI To allow for the spread of crypto culture, FM Sitharaman’s avoidance on the topic seems to create a “no news is good news” vibe among crypto enthusiasts.

Meanwhile, there have been a number of announcements that could help the crypto industry prosper in the long run once India finalizes its regulatory framework.

For example, FM Sitharaman said that India is becoming optimistic about a technology-driven economy.

The country is also accelerating efforts to adopt and promote clean energy production and use, which could boost India’s position in the power-intensive crypto mining business.

Crypto industry experts have recognized the focus that India is putting on the overall digital transformation of the national financial sector.

“The push to improve financial literacy and build DigiLocker as a one-stop KYC solution is positive for the wealth tech ecosystem. Using it has helped us a lot at CoinSwitch to implement more user-friendly KYC standards,” Ashish Singhal, CoinSwitch CEO and co-founder, told Gadgets 360.

Sitharaman also didn’t mention any development around the launch of India’s digital rupee CBDC which is currently being tested in metro cities under the supervision of RBI.