Union Finance Minister Nirmala Sitharaman on Tuesday presented her fourth Budget. While making the announcements Finance Minister Sitharaman confirmed that the banking regulator Reserve Bank of India will be issuing digital rupee soon and the digital currency by RBI will be based on blockchain technology. To understand the reactions on this development, Elets News Network (ENN) interacted with the industry leaders. Read the reactions below:
Nischal Shetty, Founder & CEO, WazirX
India is finally on the path to legitimising the crypto sector in India. It’s phenomenal news that India launching a blockchain powered Digital Rupee is phenomenal news. This move will pave the way for crypto adoption and put India in the front seat of innovation.
It’s also interesting to note how our government is beginning to recognise crypto as an emerging asset class given how our FM was referring to it as a virtual digital asset. The biggest development today, however, was a clarity on crypto taxation. This will add the much needed recognition to the crypto ecosystem of India. We also hope this development removes any ambiguity for banks, and they can provide financial services to the crypto industry.
Overall, it’s good news for us, and we will need to go through the detailed version of the budget to understand the finer details.
The tax clarity is a welcome move. Overall, it’s a huge relief to see that our government is adopting the progressive stance of going ahead in the direction of innovation. By bringing in taxation, the government legitimises the industry to a large extent. The majority of people, especially corporates, who have been sitting on the sidelines because of uncertainties will now be able to participate in crypto. Overall, it’s a positive move for the industry.
Sajan Pillai, global digital transformation leader and Founder & CEO of McLaren Strategic Ventures
Introduction of digital currency is a pathbreaking initiative by the Union government, I am sure it will help to streamline the financial infrastructure, making transactions rapid and economic as well as putting inflation under control. The sector lacks comprehensive regulation at the moment and government should be cautious of this while implementing considering its highly volatile nature and security concerns.
Tarusha Mittal, COO & Co-Founder, UniFarm- a group staking platform
Digital currency seems to have finally caught the government’s attention. This signifies a good step and it is a welcome step towards the sentiments regarding cryptocurrencies as there are considerably fewer chances of a ‘ban’ or ‘prohibition’ of it, which is untenable anyway.
According to our Finance Minister, Income from the transfer of digital assets is to be charged 30% tax, plus 1% tax on the transaction. So, we now at least know what the retail users can expect this year. At the same time, the tax bracket is a bit concerning as it is on the higher end and individuals might have wanted lower LTCG taxes and carry forward of losses similar to equity or housing.
I believe the overall outcome will revolve around how the tax regime will be implemented. We would like to see the finer print to really understand the implications for asset classes- corporates and retail users.
But this is at least a start. The introduction of digital rupee using blockchain technology will further help in reducing financial and physical efforts required for money management and increase the awareness around the technology.
Piyush Gupta, CEO, Polytrade on Central Bank Digital Currency CBDC
The announcement to introduce Central bank digital currency (CBDC) by Nirmala Sitharaman, the hon’ble finance minister in Budget 2022 is an encouraging development. The remark is a testimony that the government is supportive of utilizing digital currency for larger masses. The adoption of CBDC will improve and make it easier for people to use Polytrade with the supporting infra provided by the govt. The development will make digital currencies more accessible to the people just as UPI made digital cash easier to use. We expect that in near future the government will continue to support and encourage digital currencies that will propel the GDP to $ 5 trillion as envisaged by our PM Narendra Modi.
Probir Roy Chowdhury, Partner, J. Sagar Associates (JSA)
Industry stakeholders will certainly appreciate the introduction of a centralized digital currency by the government as it promotes a reliable and alternate payment tender. That being said, the proposed digital rupee and its pricing will be entirely regulated and controlled by the government. Apart from the ‘digital rupee’, the government is not keen to recognize the availability of any other kind of digital currency in India. As a result, free market players will not be permitted to operate or use cryptocurrencies other than the digital currency issued by RBI. This will prevent market players from entering into several digital transactions that require such other kinds of cryptocurrencies. Hence, the only way to bridge this gap would be if the government came up with a set of regulations to govern all kinds of digital currencies in use in India, instead of a sole government controlled currency.
Shivansh Bhasin, Founder and CEO, The Investrology
I feel, taxing crypto is a big step forward. Surely in the short term, investors would take a hit but long term it is a step in the right direction and in alignment with the western economies (USA) in formally recognising digital assets and currencies. This definitely is a step forward towards digitalisation of economies accepting technology and its benefits in the widespread aspects for businesses. IT stocks like TCS & INFY with particular interest in digital assets would see significant opportunity in adoption of digital assets.