Hundreds of millions of Indians have their chins hung in anticipation as the day of the financial budget approaches. Indian blockchain and the crypto sector is an expectant zone with high hopes pinned up. Indian budget 2021 will ring in a judgment for several desk-banging demands.
Indian blockchain and crypto market is a young, resourceful and ambitious ground teeming with possibilities and scope for expansion. But they ask for existing laws to be modified in order to yield results.
In his budget speech of 2018, the then Finance Minister had placed a ban on cryptocurrencies, effectively cutting down their prospects of growth and innovation. The following two years have seen massive downsizing in the Indian crypto sector workforce; with companies like Koinex ending enclosures.
However, the cloud has been lifted off the Indian blockchain and crypto market since March 2020 following the Supreme Court’s ruling against the banking -ban by RBI on crypto companies. This resulted in a growth spurt in the crypto sector, even attracting foreign investors.
Awareness, in one word. Admittedly, the Indian blockchain and crypto market is young and their ‘sparks and potential’ is subject to apprehensions and speculations. Traditional mindsets are wary of such young technologies and fear collapses. The Bitcoin crash, for instance, turned a horde of traders wary of the crypto bubble.
This has sent Indian Blockchain and crypto enterprises claiming a status ‘at par’ with stock exchanges.
Fast Forward to the day
With noticeable gains from the Indian blockchain and crypto market in terms of revenue, direct employment, foreign investment, and a host of new possibilities, the country seems to only warm up to the relatively novel concept based distributed, immutable ledger that promises trust, transparency, and accountability.
The Budget Expectation
However, the budget expectation from the Indian crypto market is overwhelming with demands of amends and reforms.
“We don’t expect the Government to recognize cryptocurrencies as legitimate currencies. Nonetheless, given the fact that the business of crypto assets have expanded manifolds within the country, we expect the government to make few announcements on recognizing them as tradable commodities and provide clarifications in terms of applicability of tax. In addition, usage of blockchain technology for many Government records is also a much-awaited announcement,” said Rashmi Deshpande, Partner, Khaitan & Co.
Indian budget 2021 needs to incorporate changes in the Income Tax and GST laws to allow clarity to traders, investors and crypto companies. Experts ask for formal enforcement of virtual asset guidelines by the financial action task force (FATF) as a countermeasure against fraudulent and money laundering acts.
Clearly the Indian blockchain and crypto market has succeeded in arousing interest in foreign investors and they now seek foundation and recognition to propagate. A suitable recognition is expected to earn revenue in multiple folds and thus heighten the GDP as well as generate employment at the same rate.
In order to ensure their future, the crypto sector demands a meander about modifying the existing laws like FEMA and SEBI. This proposition aims at the regulation of fund flow and options to raise capital.
Hence a ‘full-fledged legislation’ in India budget 2021, packs the expectations of the Indian blockchain and the crypto market in a nutshell.