The crypto industry has turned its attention back to the Indian market amid indications of the government recalibrating its crypto policies.
The Situation in India
Changes in India's crypto approach may follow recent global trends favorably disposed towards the crypto industry. The Indian government, led by the Department of Economic Affairs, had planned to release a consultation paper on crypto regulation following its G20 presidency in 2023. However, India's Secretary of Economic Affairs, Ajay Seth, stated that the document needs re-evaluation due to changing scenarios. In 2022, India introduced a 30% tax on crypto income and a 1% tax deducted at source, which led to a significant drop in trading activity on local crypto platforms.
Global Crypto Policy Shifts
A global trend is emerging to create more favorable conditions for crypto traders and service providers. In February, Hong Kong introduced regulatory measures for tokenization and virtual asset exposure in authorized funds. Similarly, Australia proposed a four-pronged approach to digital asset regulation, including governance standards, licensing for service providers, custody laws, and stablecoin regulations.
Prospects for India
Amid India's policy shift, major crypto companies like Coinbase have registered with India's Financial Intelligence Unit to launch retail trading platforms. This indicates the industry's interest in re-entering the Indian market. Besides India, countries like Hong Kong, Australia, and the UAE are becoming increasingly attractive to crypto players due to their regulatory initiatives.
Signals from the Indian government about a possible policy recalibration could catalyze the return of crypto services to this market, aligning with global trends.
