China banned all private cryptocurrency activity late last year, leading to a mass exodus of crypto firms looking for a new place to live.
But China’s neighbor, India, has been a little less clear about what they want to do with the digital asset.
In 2021, it was believed that 20 million people in the country have gotten into crypto, with the country’s residents holding crypto assets worth US$5.3 billion. According to Chainalysis, an industry research firm, the local market surged 641% in the year through June 2021.
All of this is to say, even though there is a fair bit of regulatory ambiguity over crypto in the market, it hasn’t deterred many from jumping on the crypto bandwagon.
It seems as if after an extended period of “umming” and “ahhing” about what they should do, Indian lawmakers have made their stance on the matter clear and official.
On Tuesday, during her budget speech, Finance Minister Nirmala Sitharaman said that the nation plans to tax the income from the transfer of virtual assets at 30%. On top of this, the country’s central bank will launch its digital currency starting April 1.
“Imposing the tax rate makes crypto trading official now and any concern of a ban is off the table,” said Darshan Bathija, the co-founder and chief executive officer of Vauld, a Singaporean-based crypto exchange platform.
“The biggest development today, however, was a clarity on crypto taxation. This will add the much needed recognition to the crypto ecosystem of India. We also hope this development removes any ambiguity for banks, and they can provide financial services to the crypto industry. Overall, it’s good news for us, and we will need to go through the detailed version of the budget to understand the finer details,” said Nischal Shetty, chief executive of WazirX, an Indian crypto exchange, in a statement.
Bitcoin rose more than 2% from the day’s low in response to this announcement.
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