What is the Future of Cryptocurrency in India?

Future of Cryptocurrency in India

Over the past ten years, especially over the last three, the crypto sector has expanded from a tiny group of creators to a trillion-dollar worldwide business encompassing advanced technology, a wide range of applications, and millions of users. India is at the forefront of these changes. With a sizable portion of the population eager to dive into the opportunities presented, the future of cryptocurrency in India is being decided as we speak.

Significant opportunities have resulted from this astonishing expansion, ranging from infrastructure security to whole new economies like Metaverse, NFTs, and DAOs, and the established patterns of the current financial ecosystem will likely change drastically over the next decade. Because the technology is still developing, there are some difficulties still present. The usage of these digital assets has drawn the attention of governments all over the world, which may be somewhat attributed to fear and partially to a lack of stability.

Predictions for the Future of Cryptocurrency in India 

There will probably be a significant drop in traffic and a user exodus on centralized exchanges. Many users will stop using their assets and leave them unattended for a lengthy period of time. Centralized exchanges will launch more long-term investment products like Crypto Baskets, which operate similarly to mutual funds in stocks.

Everyone in the ecosystem is looking forward to a time when money is decentralized. The only problem with DeFi is that it isn’t mature enough to appeal to the general populace. This market will soon expand more swiftly than in the past while simultaneously becoming more compliant and asset-backed in order to attract more Indian retail investors.

The country received investments in blockchain and cryptocurrencies totaling $638 million through 48 funding rounds in 2021, according to Tracxn, despite the uncertainty surrounding India’s cryptocurrency future. Forty-three deals totaling more than $1 billion in investment have already been reached by entrepreneurs in the crypto and Web3 industries in the first half of 2022.

Over the course of the last few years, the government’s attitude toward digital assets has changed drastically, from an outright ban on cryptocurrencies in 2016 to some new cryptocurrency guidelines published earlier this year.

The proposed law contains a provision for a Tax Deduction at Source (TDS) of 1% for transactions with values more than 50,000, in addition to taxing cryptocurrency and other digital asset income at a rate of 30%.

Additionally, during the current fiscal year, India wants to introduce the digital rupee, a CBDC (central bank digital currency).

The Legal Future of Cryptocurrency in India 

India expects to approve regulations pertaining to cryptocurrencies shortly.

Cryptocurrency’s legality, the possibility that it may ever be ruled illegal, and the place of non-fungible tokens (NFT) and other digital assets under Indian law are just a few of the many unanswered issues that leave many people uncertain about the future of cryptocurrency in India.

Even if it could take some time to enact regulations, the most recent statements regarding taxes and the CBDC are the first significant steps toward acknowledging that cryptocurrencies might indeed be here to stay.

A framework similar to the one the US recently issued would be a decent starting point.

Is Crypto Trading Taxable in India?

A new tax framework has been put in place to tax gains and/or income from virtual digital assets, which include cryptocurrencies, NFTs, and similar tokens, as well as other assets that the Indian government may designate while it continues to consider its position on cryptocurrencies and NFTs and the future of cryptocurrency in India.

As a result, the Indian government currently levies a tax of 30 percent plus surcharge and fees on the transfer of any digital assets, such as Bitcoin or Ethereum. But it’s still unclear how cryptocurrencies are viewed legally.

The Scope of Cryptocurrency in India

According to studies, between June 2020 and June 2021, cryptocurrency adoption on the global market increased by more than 880 percent. You might be surprised to learn that India has experienced a growth of about 400 percent in just one year if we talk about statistics.

There are over 15 million investors in private bitcoin holdings in India. Young people are very interested in the use of cryptocurrencies. According to Finders, more than 40% of users worldwide are from the younger generation, defined as those between the ages of 18 and 34 who are the most eager to invest in cryptocurrency in India.

As a result, India has the world’s fastest-growing cryptocurrency market, with the industry developing much faster than most countries, thanks to their enthusiastic youth. If it continues in this route, experts forecast that India will play a significant role in the future of cryptocurrencies.

Given the vibrant local community and proactive government of India, the future of cryptocurrency in India there is looking quite bright. The Indian government is involved. The Indian government is actively developing a Web 3.0 policy. It must participate in the global strategy development process and modify its tactics to fit this fast-paced environment if it wants to be a major participant in the global Web 3 economy. Up until that moment, Indian web3 businesses should have no trouble operating in a secure environment.

In a developing country like India, cryptocurrencies offer a great deal of potential to increase financial inclusion for both individuals and enterprises. For example, reducing transaction costs and processing times can improve cross-border payments. This benefits remittance payments, foreign trade, and peer-to-peer financing.

The basics in India are sound. With over 4 million engineers who are capable of adopting cryptocurrency technologies and a youthful populace willing to utilize them, India has the capacity to establish the next wave of crypto and Web3 enterprises.

With all the resources at its disposal, India will undoubtedly lead a trillion-dollar market if it adopts these digital assets and creates a framework that is conducive to cryptocurrencies.

Experts claim that bitcoin has the power to change the established patterns of the present financial environment, and India is on a path to becoming a major player in this new industry should everything go smoothly in legal terms.

Web 3.0 and the use of Blockchain technology in finance is the eventual fate of cryptographic money, and as a worldwide head of innovation, the future of cryptocurrency in India is hinged on their ability to create sound strategies surrounding it.

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