Gandhi argued that it has been accepted that cryptocurrencies cannot be accepted as currency and is not a payment instrument as it does not fulfill the fundamental requirement of being legal tender issued by any central body. (Image: Shutterstock)
Amid news of China imposing blanket ban on cryptocurrency transactions, signs of cautious stance by government, a long-awaited announcement regarding the official cryptocurrency bill to be tabled in the upcoming winter session of the parliament, we take a look at a shuddering scenario in the case of de-legalization of cryptocurrency in India.
It is important to note that India currently has no legislation to regulate cryptocurrency, despite not having outlawed it as well. The government is forming a new committee to mull over the taxation implications of the increasingly soaring cryptocurrency trades in India.Momentum in Tier 2 and 3 citiesReports suggest that more than 15 million Indians have currently parked their money in this space.
“Various estimates suggest that over the past twelve months, more than 15 million Indians have invested in cryptocurrencies. It is currently growing at a steady pace, with huge participation coming from tier-2 and tier-3 cities of India. Cryptocurrencies are much more than volatile digital currencies. They are an asset class that provides much-needed diversification to the portfolio of any investor. Taking cues from the Chinese approach to impose a blanket ban on cryptocurrencies would surely be a massive blow to the Indian economy," says Edul Patel, CEO & Co-founder of Mudrex,
Nischal Shetty, Founder, and CEO, WazirX, adds, "Our number of users from Tier-II and Tier-III cities have grown by 2648% and contributed to 55% of total signups on WazirX in 2021. Crypto has immense potential to contribute to our $5 Trillion economy vision, given that more than 60% of states in India are emerging as CryptoTech adopters."
The immense prospect of job creation
A recent Nasscom-WazirX report suggested the crypto tech industry can create an economic value addition of 184 billion dollars in India by 2030, reaching up to 241 million dollars in the next 9 years. The sector which currently employs 50,000 individuals, has the potential to grow twice as fast and create more than 800k+ jobs in the country by 2030.
“Over the past twelve months, several cryptocurrency-based startups in India have secured millions of dollars in funding. These companies have added thousands of jobs. Various listings on sites such as Naukri.com and LinkedIn suggest that more than 20,000 candidates are currently being hired across roles in cryptocurrency and blockchain. If the government recognizes crypto as an asset class, it will be taxed as per the applicable laws. It could be a huge boost to India's treasury.
"Imposing a ban on cryptocurrencies would mean that the government misses out on the opportunity to tax the gains on cryptocurrency trading. Finally, several cryptocurrency-based startups in India have many foreign investors. Banning cryptocurrencies would essentially mean that India loses out on a huge amount of FDI inflows. These inflows would otherwise have aided to reduce the deficit in India’s Balance of Payments," Patel adds.
There is no doubt that cryptocurrencies and blockchain have the potential to drive the next phase of job creation for India’s highly skilled youth. Future innovations in the cryptocurrency and blockchain space have the potential to be tagged Indian, along with being a solid avenue for job creation and economic growth.“Adoption of cryptocurrencies will also aid inflow of foreign investments from capital-rich countries who are looking for projects to support in this field. Just like the internet which gave millions of Indians the freedom to express and opened new avenues without disrupting the Government’s oversight, cryptocurrencies can also be embraced by us," rounds off Vikram Subburaj, Co-Founder and CEO of Giottus Cryptocurrency Exchange.