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Web3 and cryptocurrency technologies are evolving rapidly, offering India a significant opportunity. Despite hosting the G20 Summit and participating in global discussions on crypto regulations, India’s policy on Virtual Digital Assets (VDAs) and Web3 remains stagnant. Meanwhile, other G20 nations are making swift regulatory advancements. With a large tech-savvy population and a robust fintech ecosystem, India has immense potential in the crypto industry. However, the absence of clear regulations could hinder its progress in the fast-growing digital economy. To attract investments, create jobs, and ensure security, India must establish a well-defined crypto policy without delay.
Global Progress While India Lags Behind
While India hesitates, other nations are taking decisive steps. Brazil has integrated blockchain into its financial system, and Argentina has updated its tax regulations for crypto. The European Union has already implemented its crypto regulatory framework, while the U.S. and the U.K. are finalizing their policies. Countries like South Korea and Japan have established strong regulatory and security measures for cryptocurrencies. Meanwhile, smaller nations such as Singapore, Hong Kong, and the UAE have swiftly embraced the sector, transforming themselves into major Web3 hubs.
India’s Crypto Potential and the Risk of Losing Ground
India is one of the largest crypto-adopting nations, and with the right policies, its crypto-tech industry could reach $241 million by 2030. However, outdated tax rules and complex procedures are pushing traders and companies toward foreign markets. The 1% TDS (Tax Deducted at Source) on crypto transactions has reduced domestic trading, prompting users to switch to international platforms. Despite investing ₹4,100 crore in hosting the G20 Summit, India risks missing out on the economic benefits of crypto unless it formulates a structured regulatory framework.
Smart Regulations Instead of a Ban
Instead of banning crypto, India needs a balanced regulatory approach that:
- Protects investors from fraud
- Encourages innovation for economic growth
- Establishes a simplified tax structure to prevent capital flight
- Integrates crypto into the legal framework for financial security
With global financial institutions launching crypto Exchange-Traded Products (ETPs), it’s evident that crypto is becoming a mainstream financial asset. If India wants to remain a key player in the digital economy, it must act swiftly to implement a clear, secure, and progressive crypto policy.
A Timely Move Can Secure India’s Future in Crypto
India’s crypto industry is poised for growth, but success depends on a well-crafted regulatory framework. Taking timely action will not only strengthen India’s position in the global economy but also unlock new opportunities for technological and financial advancements.
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Prateeksha Thakur
