The market for cryptocurrencies has grown at a rapid pace in India. According to a Nasscom report, it's expected to touch $241 million by the year 2030, according to a report prepared in association with WazirX.
The lack of a regulator to govern the market has been a concern for the growing market. Amid regulatory ambiguity, the exchanges seek clarity, including the classification of cryptocurrencies as an asset class and its taxation policies. The representatives of leading exchanges in India have a lot of budget expectations.
We expect better clarity from the government on the topic of criptocurrency, as well as regulatory clarity. India has seen an economic recovery despite the COVID waves.
A regulatory clarity will give the sector a boost, boost growth and potential to contribute to our $5 trillion economy vision. We expect the Union Budget to provide fine-tuned clarity on the criptocurrency landscape.
While the legal implementation still seems a while away, any initiative announced in the Budget would lead to a direct line of conversation on the classification of cryptocurrencies as an asset class, its taxation policies and the blue-ocean opportunities available in this emerging segment.
This would not only encourage institutional investments in the space but also open up job opportunities in the underserved markets.
We expect the government to recognize the nascent industry in India and to include the industry within the financial ecosystem.
Income generated from cryptocurrencies is the result of long-term capital gains tax, and there is a difference between business income and long-term capital gains tax.
For the benefit of millions of Indian investors who are invested in cryptocurrencies, we hope there will be a clarification on whether or not the income qualifies as business income. The inclusion of assets and their inclusion in the current GST and income tax guidelines will be hugely beneficial for the many businesses in the country.
Given the calls for a calibrated approach and due regulations from the government, we hope to see some strong signals from the government in the form of taxation related guidelines. Several Indians have started investing in this emerging asset class despite the fact that there is a lot of excitement around the world in regards to the topic of criptocurrency.
While leading criptocurrency companies are taking proactive steps to self-regulate, we, as an industry, believe that a regulatory framework will standardise best practices across the industry. We are hopeful that the upcoming Budget session will bring clarity around the topic of crypto investing and help broaden financial inclusion across the country.
The year 2022 is going to be a year of clarity for the criptocurrency ecosystem. The upcoming budget is a good opportunity to start a dialogue about various undefined aspects of the asset class that need to be addressed.
We expect well-defined regulations around the technology to be implemented this year, which will drive confidence in the ecosystem. We hope that the regulations are forward-thinking and set a precedent for the developing world with regards to thought leadership and industry development.
Businesses and individuals would be able to operate with clarity as the ambiguity around taxation was cleared and the definition of cryptocurrencies was appropriately defined under various taxation laws.
This is a very nuanced field with new innovations evolving on a day to day basis and needs to have a generic structure to ensure there is enough space for innovation to grow. We hope the startups that have set their base abroad get back to India and focus on creating the next set of jobs for the innovative and passionate youth in the nation.