Crypto & Blockchain market reactions on Budget 2022-23: As Finance Minister Nirmala Sitharaman on Tuesday made an announcement outlining the economic growth for India over the next 25 years.
Here’s what the Crypto & Blockchain sector experts are saying about the Union Budget 2022:
Dr. Gunjan Bhardwaj, Founder and CEO, Innoplexus:
We congratulate the government on the budget and hope this encourages entrepreneurship and new research in blockchain. It’s a welcome sign from the GOI to bring the cryptocurrencies into the tax ambit. It also puts an end to all the speculation and confusion. The 1% TDS is a master stroke for also tracking the trading volumes and monitoring the movement of liquidity through cryptocurrency exchanges.
Jai Prakash, Co-founder & CEO, VRXtream:
This has been a digital & Growth oriented budget. Although the government has not proposed any bill on crypto, the two regulatory clarifications from the FM has made a lot of things clear for this nascent but booming industry. It is wonderful to know that RBI will introduce the Blockchain powered Digital Currency. This would certainly give an impetus to the participation of institutional players in the blockchain space. Also the announcement of 30% tax on the transfer gains of digital assets is most welcome as it establishes the legitimacy of crypto trading in India. Hoping to see that as the new class of assets finds more traction with the people, cryptocurrencies are recognised and widely adopted as the alternative investment vehicles.”
Arun Pandey, Co-founder, Beyondlife.club:
It has been the industry’s request for some time to bring digital assets and currency in the regulatory framework and it is heartening to note that the Hon’ble FM and Hon’ble PM have recognised the sector. Taxation and TDS on Digital Assets have come as a sudden move for the industry. It might hit user sentiments in the short term, however, we shall see how the ecosystem evolves in the country and are committed to work as per the rule of the land.”
Sajan Pillai, Chairman, McLaren Strategic Ventures:
Introduction of digital currency is a pathbreaking initiative by the Union government, I am sure it will help to streamline the financial infrastructure, making transactions rapid and economic as well as putting inflation under control. The sector lacks comprehensive regulation at the moment and the government should be cautious of this while implementing considering its highly volatile nature and security concerns.”
Vikas Singhania, CEO, TradeSmart:
Legalising cryptocurrencies the finance minister has imposed a 30% tax on cryptocurrencies and NFTs bring it at par with those charged on speculative income. Though on the higher side, traders can now trade in these assets without fear of government intervention.
The Budget has removed the legal uncertainty on Crypto Currency trading. People can trade in Crypto but they will have to pay tax. It is to be checked in fine print, that if corporations trade in crypto then, the corporate tax is applicable or 30% or whichever is higher.”
Vivek Saxena, CEO & Co- Founder, Thinkly:
“While some of the bitcoin and other crypto asset investors might be disappointed with the 30% tax, the silver lining is that the government has taken a nuanced view around it and recognised digital assets as part of the evolving future – making it illegal and driving it underground would’ve done this asset class more harm”.
Abhishek Malhotra, Managing Partner, TMT Law Practice:
Cryptocurrency has been brought into the tax net of 30% which is a welcome move, as the same does not seem to be subject to a complete ban anymore. Further, as gains from its trading will also be taxed now, this will bring in some faith in the investors.
The proposal to start digital rupee by 2022/ 2023, only indicates that the government is abreast of the changes taking place around the world and will take lead in granting approvals and investments. This also gives assurance to individuals that digital currencies will not be outlawed.
Aniket Jindal, Co-founder, Biconomy:
‘The blockchain based digital rupee is a welcome step. While the critics rightly point out that it’s not decentralized & issued by the government, we need to understand that the mainstream adoption of web3 & crypto won’t happen overnight. It will happen slowly with small steps toward our eventual goals. And such a blockchain based digital rupee has the potential for being a big step in onboarding 100s of millions of Indians into the blockchain economy. It will also help open one of the largest economies to new innovations in the web3 ecosystem.’
Tarusha Mittal, COO and Co-founder, UniFarm:
‘Digital currency seems to have finally caught the government’s attention. This signifies a good step and it is a welcome step towards the sentiments regarding cryptocurrencies as there are considerably fewer chances of a ‘ban’ or ‘prohibition’ of it, which is untenable anyway.
According to our Finance Minister, Income from the transfer of digital assets is to be charged 30% tax, plus 1% tax on the transaction. So, we now at least know what the retail users can expect this year.
At the same time, the tax bracket is a bit concerning as it is on the higher end and individuals might have wanted lower LTCG taxes and carry forward losses similar to equity or housing.
I believe the overall outcome will revolve around how the tax regime will be implemented. We would like to see the finer print to really understand the implications for asset classes- corporates and retail users.
But this is at least a start. The introduction of digital rupee using blockchain technology will further help in reducing financial and physical efforts required for money management and increase the awareness of the technology.’
Aishwarya Shivakumar, CEO, Oddz Finance:
‘The inclusion of the crypto and blockchain sector in the Union Budget 2022 is a welcome step taken by the Government of India. With the announcement of RBI launching its own digital currency using blockchain in 2023, the awareness of the technology and the economics surrounding it is only bound to increase. This announcement also implies a positive outlook of the government towards this technology and its potential.
Furthermore, clarity regarding taxation of virtual assets helps clear out ambiguities regarding the Government sentiments around cryptocurrencies as the ambit of the Finance Ministry has expanded towards the cryptocurrency and digital assets sector. Income from the transfer of digital assets entails taxation of 30% along with a 1% tax on the transaction. This seems to be on the higher spectrum but it is a start and we hope to go only forward from this. We are further looking forward to seeing how it fares in more detail in the coming months.‘
Aman Sanduja, Co-Founder, Moving:
“30% tax on cryptocurrency is a strong step towards acceptance of the technology and recognizing it as an asset class. Soon a regulatory body would be announced as well. This bold step would give confidence to the new entrants and existing investors to invest and become a part of this revolution. India is leading the show from front, being one of the first countries to tax cryptos is an example and benchmark of democracy. We are all gonna make it happen. Congratulations to the early adopters, believers, influencers, and regulators.
Vikas Malpani, Co-Founder & CEO, Leher App:
Startups Welcome the budget especially the nascent Web 3 Sector will receive a major confidence boost. Digital Asset taxation and Cryptocurrency coming under TDS is a move towards mainstreaming crypto. This will have far reaching opportunity for web 3 builders in India”
Akhil Gupta, Head of Technology/CTO, Faballey:
The amount of focus technology has received in this budget is truly a wonderful and welcome step towards a great future. The introduction of the digital Rupee based on blockchain will give a tremendous boost to the whole cryptocurrency and blockchain ecosystem by providing legitimacy and formal acceptance.
Blockchain, which can be used to solve innumerable problems, will now be explored with a lot more trust by many Indians who were still hesitant in doing this. Considering that this domain is still very new, providing Indian industries and startups with this kind of encouragement would really help India in becoming a world leader in new-age tech. The transition from Potli to Tablet in the hands of the financial minister is a sure sign of great future in the digital space.
Akshaya Bhargava, Founder & CEO, Bridgeweave:
“Today’s announcement on tax on crypto income is a great move forward by India for 3 reasons – firstly, this move recognises crypto as a legitimate asset class and crypto trading as a legitimate activity. Secondly, clarity on tax will bring more people into the crypto industry, so it will boost industry growth. Thirdly, a well-regulated crypto eco-system will create the right environment for innovation.
That said, I would indeed wish for one change – to be able to carry forward losses into the next tax year. Crypto is inherently volatile and this will help investors.”
Kumar Gaurav, Founder & CEO of Cashaa:
The industry was waiting for the government to recognise crypto technology and innovation. Today, it is the beginning of a revolution when the government has itself announced the launch of digital cryptocurrencies. We, as an industry, have taken a step ahead towards adoption of digital currencies. Yes, currently taxation imposed is a little on the higher side, but the industry which was already growing rapidly in the absence of regulation, will now thrive with the government’s clear support
Venus Dhuria, Co-founder, AppyHigh:
Introduction of a digital currency and the introduction of a tax regime for digital assets is a welcome start. It signifies that the government is preparing for a future where these concepts will become mainstream and thus taking the right steps towards a full-fledged digital transformation of the Indian economy. Though the 30% tax rate is on the higher side, and more clarity is required on the setting off of losses, this is still a start and hopefully with time more clarity will emerge. Another benefit of recognising anything via regulation is that it prevents unscrupulous or illegal activities in space.”
Balaji Kandregula, Vice President, MSRvantage:
A new digital rupee powered by blockchain technology will be issued by the Reserve Bank of India starting 2022-23. This was announced by Finance Minister Nirmala Sitharaman during the Union Budget 2022 today. Blockchain technology also powers cryptocurrency, non-fungible tokens (NFTs) and it is a distributed ledger, updated in real-time. In a blockchain, the transaction records cannot be changed at all and the ledger is transparent and authentic, which is why it is used in cryptocurrency as well.
According to us, the rapid rise of crypto is changing the global financial landscape forever, creating both risks and opportunities for new and existing players. Underpinned by blockchain or “distributed ledger” technology, crypto disrupts traditional business models by removing the need for trusted intermediaries. As a result, the explosive expansion in crypto applications now underway marks the start of a revolution that no organization can afford to ignore. Collaborative technology, such as blockchain, promises the ability to improve the business processes that occur between companies, radically lowering the “cost of trust.” For this reason, it may offer significantly higher returns for each investment dollar spent than most traditional internal investments.”
SivaGopal M, Founder of MSRcosmos:
The purpose of creating a digital currency is to provide significant benefits, such as reduced dependency on cash, higher seigniorage due to lower transaction costs and reduced settlement risk. Countries are looking towards CBDCs for a few key advantages — reduced printing costs, decreased settlement risks, avoidance of time zone issues, and cost-effective globalization of payment systems. Another important factor about the growing interest of central banks towards CBDCs is to wean away citizens from private virtual currencies that may potentially harm them.
For India in particular, another benefit of RBI’s CBDC is that India’s high currency to GDP ratio could be reduced if cash usage is reduced by CBDC introduction. While India has made huge strides in digital payments with UPI, the significant displacement of cash is still a challenge due to the anonymity that cash offers.
The new digital currency would also possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option. Despite the fact that CBDCs were inspired by bitcoin, they are distinct from decentralized virtual currencies and crypto assets, which are not issued by the government and lack the status of legal tender.
Digital Rupee will also provide an opportunity for India to establish the dominance of Digital Rupee as a superior currency for trade with its strategic partners, thereby reducing dependency on the dollar. It would reduce the cost of currency management while enabling real-time payments without any inter-bank settlement.”
Ajay Lakhotia, Founder, StockGro:
The government of India & the finance ministry has taken the exemplary initiative to launch digital currencies, making India truly digital. This will reduce the cost of physical currency management and build accountability and traceability. The much talked about 30% tax on income from digital assets, i.e. cryptocurrency resolves the sector’s regulatory overhang to quite an extent through plugging tax leakage.”
Raghunandan G, Founder & CEO, Zolve:
With this budget, investors at large were hoping to see an update on Crypto and other digital assets. The introduction of ‘Digital Rupee’ goes on to show the acceptance of digital currency and digital assets nation-wide, and provides a pathway for India to play a more proactive role in the international financial arena. With clarity on the taxation implications on digital assets, it is now set to go mainstream. Coupled with the Government’s efforts to boost the overall fintech ecosystem in this Budget by promoting economical and user-friendly payment platforms, this will definitely provide a fillip to making India a fintech powerhouse.”