India, known for its tough stance on cryptocurrencies, is reportedly reconsidering its regulatory approach as more countries embrace digital assets.
Global Adoption Pressures India to Reevaluate Crypto Stance
India’s economic affairs secretary, Ajay Seth, recently signaled a possible shift in the country’s crypto policy. Speaking to Reuters, Seth remarked that digital assets “don’t believe in borders,” suggesting that India may not want to fall behind as other nations adopt cryptocurrencies.
This potential change comes despite the Indian government’s history of strict crypto regulations. Currently, India imposes a 30% capital gains tax on all digital asset profits, treating both long-term investments and short-term trades equally. Additionally, a new tax of up to 70% on previously undisclosed crypto gains was introduced under India’s Income Tax Act.
Crypto Analysts Predict Global Race for Digital Assets
The shift in India’s regulatory approach aligns with predictions from pro-crypto analysts and Bitcoin advocates, who argue that once a few countries adopt cryptocurrencies, others will follow suit to stay competitive. This theory suggests that India might be feeling the pressure to reconsider its policies as global interest in digital assets grows.
However, critics argue that India’s existing tax policies are designed to stifle crypto adoption. Amit Kumar Gupta, a legal practitioner at the Supreme Court of India, described these taxes as “draconian,” claiming they aim to discourage the development of permissionless blockchain technologies.
Gupta further noted that the Indian government perceives cryptocurrencies as being “worse than gambling,” associating them with money laundering and terror financing. “Their stance is that we are not going to use or allow anyone to use cryptocurrency because this technology is only for money laundering and terror funding—these kinds of activities,” Gupta told.
India’s Focus on Central Bank Digital Currency (CBDC)
While India remains cautious about decentralized cryptocurrencies like Bitcoin, the government has shown enthusiasm for central bank digital currencies (CBDCs). Shaktikanta Das, the former governor of the Reserve Bank of India, praised the central bank’s pilot program for a CBDC, reflecting the government’s preference for a regulated digital currency framework.
As international adoption accelerates, it remains to be seen whether India will adjust its crypto policies or continue focusing on state-controlled digital currencies.
