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- India’s crypto sector continues to seek regulatory clarity and lower transaction taxes.
- Stablecoins and tokenized real-world assets could become major growth drivers.
- Bitcoin’s sharp decline has intensified discussions around market structure and investor confidence.
India’s cryptocurrency industry is once again at a critical crossroads. While policymakers continue discussions around digital asset regulations, industry leaders are urging authorities to modernize the country’s tax framework and provide long-awaited legal clarity. At the same time, a sharp Bitcoin market correction has reinforced the importance of creating a stable and transparent environment for crypto investors.
Industry Calls for Crypto Tax Reforms
Nischal Shetty, founder of WazirX, recently outlined several priorities he believes could help strengthen India’s digital asset ecosystem. At the center of his concerns is the country’s 1% Tax Deducted at Source (TDS) on crypto transactions.
According to Shetty, the levy has significantly reduced liquidity by locking up capital that traders would otherwise use to participate in markets. He argues that either eliminating the tax or reducing it to a negligible level would help restore trading activity and improve overall market efficiency.
The executive also noted that Indian crypto users have not stopped trading because of the tax regime. Instead, many have migrated to overseas platforms, reducing activity on domestic exchanges and limiting the effectiveness of local oversight.
Stablecoins and Tokenized Assets Gain Attention
Beyond taxation, Shetty sees stablecoins as one of the most promising opportunities for mainstream blockchain adoption in India. Unlike highly volatile cryptocurrencies, stablecoins can offer faster and cheaper payments, remittances, and settlements.
He also highlighted the potential of an Indian rupee-backed stablecoin. If properly regulated and fully backed by transparent reserves, such a digital asset could facilitate global trade settlements while expanding the international use of the rupee.
Another area attracting attention is tokenized real-world assets (RWAs). Shetty believes government bonds, commodities, gold, and fractional real estate could benefit from blockchain-based ownership structures once legal definitions and regulatory guidelines become clearer.
Bitcoin Selloff Adds Pressure to Crypto Markets
While India debates policy changes, global crypto markets have faced renewed turbulence. Bitcoin fell approximately 6.5% over a 24-hour period, dropping toward the $66,000 level and triggering more than $1.7 billion in liquidations across digital asset markets.
The decline was fueled by multiple factors, including continued outflows from spot Bitcoin ETFs, renewed concerns surrounding Mt. Gox creditor distributions, and market reactions to Strategy’s rare Bitcoin sale.
The broader selloff pushed the Crypto Fear & Greed Index into “Extreme Fear” territory, highlighting growing uncertainty among investors.
Also Read: Coinbase Re-Enters India: Direct INR Deposits and Withdrawals Now Live for Crypto Traders
Despite short-term market volatility, Shetty remains optimistic about India’s long-term crypto prospects. He welcomed recent parliamentary discussions involving major industry participants, viewing them as a positive step toward a tailored regulatory framework.
For many market participants, the path forward appears clear: balanced taxation, comprehensive regulations, and support for innovation could help India unlock the full potential of blockchain technology. As Bitcoin volatility continues and global adoption accelerates, the pressure on policymakers to provide certainty is only increasing.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
