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The author is CEO & co-founder of Giottus Cryptocurrency Exchange
More than 15 million Indian investors have an exposure to cryptocurrencies today. This figure has grown 7-8x in 2021 and is set to grow multi-fold this year as well. As this asset class permeates the wider community, the need for a standardized understanding of regulations and taxation is growing. The upcoming budget session of the Parliament can bring clarity and clear all uncertainties that surround the sector today. We try to elucidate how regulations will help crypto investors this year.
Crypto can be a complex world for new investors. New investors would need guidance and education with respect to functionalities, operations and the risks involved. This can be achieved when conversations around Bitcoin and other cryptocurrencies grow amongst the public. A regulatory framework will enable drive such conversations in mass media.
Mass adoption will also necessitate simplified technological offerings. India-based crypto platforms and products would need to evolve – this requires investments in the sector which will proliferate once regulations are defined.
Regulation helps in setting standards with respect to education, compliance, KYC, consumer protection as well as insurance. Overseen by a body that has regulated traditional finance, the framework will provide authenticity to institutions (such as crypto exchanges and platforms) and make it easier for new investors to adopt their services.
Such a framework will also weed out actors with dubious intentions from the industry and possibly eliminate scams.
Questions on crypto taxes have no standard answers in the industry today. Opinions of tax consultants are also currently subjective. Clarity on taxation will help investors to park capital with confidence and to estimate implications of every transaction they undertake that year. A forward looking tax regime – that encourages responsible investing in the asset class – will allow for innovations in the sector and likely boost the economy with respect to tax collections and business growth.
The crypto asset class is likely to evolve and represent a full suite of financial products for investors globally. For example, investors who love to invest in mutual funds will be served with crypto equivalents that are defined for the Indian audience and regulated locally. They will be backed by registered crypto wealth advisors who will make investing in crypto a convenient experience. Such services can mushroom once regulations allow for them.
2022 can be a great year for the crypto industry in India. Investors will hope that regulations bring clarity and confidence soon to allocate more of their portfolio in the asset class.
Disclaimer: This article was authored by Giottus Cryptocurrency Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.