Crypto Tax: Global Players Applaud Crypto Tax as First Step in Giving Back

Mumbai: The global crypto community hailed India’s announcement to tax cryptocurrencies and develop a blockchain-based, regulator-backed digital currency as a significant step towards legitimizing the asset class and encouraging innovation in blockchain technology.

“It means that India recognizes the importance of crypto, digital assets and their underlying technology, blockchain as well,” said Anndy Lian, president of Singapore-based exchange BigONE. “The Next Crypto Bull Market May Be Led by India.”

On February 1, Finance Minister Nirmala Sitharaman announced that the government would impose a general tax rate of 30% on the transfer of “virtual digital assets”.

Global crypto players believe that tax clarity will allow fence custodians to activate their investments in India.

“Tax clarity is a very positive step forward. The Indian government is taking a progressive stance by forging ahead in the direction of innovation. By introducing taxation, the government is to a large extent legitimizing the tax industry cryptography and commerce,” Serdar Bisi said. , CEO of Tycoon, a Cyprus-based crypto startup. “It now allows institutions and companies that have been sidelined due to uncertainty to participate in this emerging market and industry.”

Adam Mazzaferro, founder of Australia-based @pay, said people forget that cryptocurrencies are just another form of asset class, just like stocks and real estate, and should be treated the same. manner, and the Indian government’s announcement validated the asset class. .

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“The Indian government’s move to tax cryptocurrencies is welcome as it is consistent with how other modern economies treat cryptocurrency,” Mazzaferro said. “While the 30% tax rate is relatively high, any form of government regulation of cryptocurrency is encouraging as there is a long way to go to validate the asset and make it more mainstream and widely accepted in everyday business and commerce.”

Kaz Patafta, co-founder of the First Eleven Club and director of McDonald Patafta & Associate Lawyers, an Australian law firm, said imposing a tax on crypto assets is now consolidating crypto adoption in India and allays fears of a regulatory ban in one of the largest transactional markets for virtual assets.

Wahid Chammas, a Cyprus-based investor and chairman of Faith Tribe, an open-source fashion design platform that works with many Indian fashion designers, said these designers will, for once, have a chance to thrive in the market. highly competitive world. . “But it would be such a shame if the new crypto tax regime made them uncompetitive with this highly regressive tax,” he said.

Global crypto experts believe that the government’s announcement of 1% TDS at the time of transfer of digital assets will be a powerful tool to track transactions.

Pratik Gauri, CEO and Founder of Singapore-based 5ire, said the use of Tax Deducted at Source (TDS) was a necessary part and with the growing awareness of KYC/AML and how shady segments of society often use crypto to launder money, TDS can provide the government with the information and money to build a crypto surveillance infrastructure for tax purposes.

“I don’t think 1% is a prohibitive amount. And it will simultaneously bring needed foreign exchange and investment to India,” he said.

On Tuesday, Changpend Zhao, CEO of Binance, the world’s largest crypto exchange, said on Twitter, “Crypto is legally recognized in India with a 30% tax.”

However, experts say that recognizing digital assets under income tax is not akin to granting legal status.

India is transitioning from an unregulated crypto market to a government-controlled crypto market, which will benefit all industry stakeholders, according to Charles Tan, Head of Marketing at Coinstore. .

Global crypto exchanges are also closely watching India’s progress on its CBDC which, according to the budget announcement, will launch in FY22-23.

Jay Hao, CEO of OKX.com, said that central banks around the world have already launched or are about to launch their digital currencies and that India was slightly behind in the race for digital currencies, mainly in due to regulatory hurdles and reluctance to embrace the growing popularity of digital assets/digital currency around the world. “I hope that the announcement made by the Minister of Finance regarding the CBDC will be implemented without further delay, as it will give a much needed boost to the blockchain industry in India,” he said. declared.

The announcement, according to Santiago Sabater, co-founder of DeFiChain Accelerator in Germany, was a step in the right direction, and tax security is the first step for adoption to progress. “If India manages to support crypto startups, create fairer regulations and enable cooperation with banks, it has the potential to become the world’s leading crypto hub for web 3.0,” Sabater said.

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