Crypto sector hails RBI's digital move, calls it legitimisation

Indian Crypto players have hailed the Budgetary announcement of launch of RBI’s digital currency using blockchain technology. The government has also proposed a 30 percent tax on income from transactions in crypto and NFTs. 

The move has provided much-needed clarity on the government's stance on the matter and will boost start-ups in the blockchain segment, say crypto experts.

Shivam Thakral, CEO of BuyUcoin, a homegrown cryptocurrency exchange, said, “RBI has always been ambitious with its currency launch. The RBI’s cryptocurrency will catalyze the growth of blockchain infrastructure in India and will encourage more entrepreneurs to join the blockchain revolution and will create a government-approved market for the launch of new/existing digital assets.”

“If RBI allows the trading of CBDC on private exchanges, it will add a new dimension to public-private partnerships in India’s fintech space,”  Thakral says. 

Sumit Gupta Co-Founder and CEO of CoinDCX also feels that the budget is forward-looking and will help the crypto industry create modern, powerful, digital, and sustained growth. 

“Mainstreaming” of assets worth $6bn 

The government’s move is largely being viewed as an attempt to legitimise the private crypto segment in India, which is worth $6 billion. 

Ashish Singhal, Founder and CEO, CoinSwitch and Co-chair Blockchain and Crypto Assets Council (BACC) says, “The regulatory guidance on tax from the government furthers the mainstreaming excitement of this emerging asset class with over $6bn worth of investments in India. It is also the gateway to the future decentralized world, aka Web3.0. We hope to work with the government to help bring crypto-asset taxation at par with other asset classes and participate in the central government’s vision to promote economic growth.’’

Not everyone believes so. Some market experts say crypto will become legal only when the government passes a law in this regard in the parliament. A Bill in this regard is pending for consultation since the winter session. 

Nithin Kamath, founder and CEO of Zerodha, tweeted, “The good news for crypto is that it was finally acknowledged in the budget. That doesn't mean it's legal—it will only be after the crypto bill. Until then, regulated entities in India can't offer trading in crypto.”

Encouraging & discouraging both

While the industry is enthusiastic about the 'legitimisation' of cryptos, stakeholders are concerned about the taxation part. 

"We are happy to note that the FM has announced crypto tax provisions in this budget, legitimising crypto transactions in some way. However, it is disappointing to see that the Government has decided that the income from the transfer of digital assets will be taxed at 30 per cent -- which seems to be too high, given that the NFTs, cryptocurrencies, and digital assets space is already booming and has immense potential for the economy in the near future", says Om Malviya, President, Tezos India. 

Faster implementation needed

India is slightly lagging in the digital currency race mainly due to the regulatory hurdles and reluctance in accepting the growing popularity of digital assets/digital currency around the world, says Jay Hao, CEO of OKX.com. 

He hopes the announcement made by the Finance Minister regarding CBDC is implemented without any further delay as it will give a much-needed push to the blockchain industry in India.