The Budget and the cryptocurrency Bill could functionally classify different operators in the cryptocurrency space and impose differing tax liabilities on both the supply and demand sides.
Gautam Kathuria and Kazim Rizvi
India’s financial services industry has seen rapid growth and significant innovation over the last few years. One example is the rapid adoption of cryptocurrencies in India and the wider blockchain ecosystem.
This sector is buoyant due to a growing investor base and numerous crypto unicorns. This is highlighted by estimates which estimate the potential contribution of digital assets at $1.1 trillion by 2032. It is being considered a major source for FDI and a driving force in the creation of thousands ancillary jobs.
Despite all these factors, there is still regulatory uncertainty about the sector’s future. This will be clarified by the Union Budget.
The proposed cryptocurrency Bill’s initial highlights point to the role of SEBI in regulating crypto as an investment asset in capital market. With the RBI overseeing the wider monetary and foreign currency aspects, This is crucial, as Reuters reports that the number of cryptocurrency investors in India is around 15-20 million with a holding of almost Rs 400 billion.