From ban to regulations, India’s digital asset-blockchain story has come a long way
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2023 was a year of policing for digital currencies and blockchain in India as top government officials, including the country’s prime minister and finance minister, stated several times that a “common global regulatory framework” needs to be put in place. India assumed its Group of 20 (G20) Presidency in December 2022, with digital asset regulation as one of its agendas. The G20 is an intergovernmental forum of the world’s major developed and developing economies, collectively accounting for 85% of global gross domestic product (GDP) and 75% of international trade. “No single country can handle or regulate crypto in any form,” said Finance Minister Nirmala Sitharaman. At the same time, India admitted the significance of blockchain technology and artificial intelligence (AI). “Use of blockchain technology is going to rise by about 46% in the next few years,” Sitharaman said. “I see a bigger role of artificial intelligence in the area of fintech.” “The future of finance is going to be driven more and more by the digitization of banks,” she added. The announcements are significant since the world’s biggest democracy has long cautiously handled digital currencies and blockchain technology. Digital currency trading in India rapidly gained popularity as an asset class amid traditional investment tools like stocks, bank deposits, gold, and real estate. India’s central bank, the Reserve Bank of India (RBI), had insisted on a complete ban on digital currencies. However, instead of an outright ban, India imposed one of the harshest taxation on digital asset trading last year—30% flat tax on all digital currency income with no provision to offset losses and a 1% tax deducted at source (TDS) on all transactions above Rs 10,000 ($119). This may likely lead to a loss of about $1.2 trillion in trade volume on domestic exchanges over the coming years, a study from Esya Centre, an Indian policy think tank, claimed. The study also pointed out that due…
Filed under: News - @ December 29, 2023 2:24 pm