It has been quite a few years since the Indian government started a serious discussion on the prevalence of cryptocurrencies in the global financial markets. However, from the government’s standpoint, the cons of such of digital revolution far outweighed the pros that it entailed for the Indian citizens.
Nonetheless, it didn’t deter the Indian population a bit from dabbling into the cryptocurrency landscape that is currently dominating the BFSI & Fintech domains of the world economies. Know the latest dynamic trends with link as it continues to explore the intricacies of financial markets.
Food for thought
Why was India skeptical of this digital revolution despite witnessing the entire decimation of traditional financial systems? What took the government so long to finally come to a consensus that cryptocurrency is inevitable and will continue to proclaim its dominance in the peer-to-peer platform? It is only because governments cannot trust any disruptive technology right off the bat without considering its implications on the society & the citizens residing in it.
It also stimulated the government to impose significant restrictions on such cryptocurrencies to mitigate the illegal activities that were being conducted under the pretense of cryptocurrency. However, the entire story took a big U-turn when the finance minister of the country, Mrs. Nirmala Sitharaman overtly announced the adoption of cryptocurrencies in her Union Budget 2022 speech.
Still not accepted as legal tender
Despite being given a reluctant nod to cryptocurrencies, the Indian government will not be accepting such cryptocurrencies as the legal tender of money. Matter of fact, according to the insiders & leading government officials, the latest remark of “Cryptocurrencies will NEVER become legal tender in India” took millions of traders & investors off guard. Hence, it is quite obvious that the future of such cryptocurrencies & NFTs (Non-fungible tokens) is not so bright in the Indian subcontinent. Government officials have tried to warn private investors & individual investors time and again to abstain from the unregulated crypto industry which poses significant threats to the overall financial apparatus of the country.
On the other hand, to make up for the latest shock that the government had in store for the investors, RBI will be launching a digital rupee which will be regarded as the legal tender of money in the country. The finance minister has already announced that the income thus generated from the transfers of digital assets will be subsequently taxed at a proposed rate of 30%. Furthermore, the gifts that will be received digitally will also be subjected to taxation.
You can run, but can’t hide from Taxation
Considering the profuse amount of cryptocurrency transactions being conducted on daily basis, the government had to impose a tax regime on the prevailing trends. Now, this is not something that investors or traders would want to hear but this is a concrete reality in its purest form. The specific rules established by the government for people to follow who want to take their cryptocurrency endeavors must be respected.
The digital rupee can be used to purchase on-digital assets. It can be done via UPI payments or digital wallets, but hoping that cryptocurrencies will become legal tender in India is equivalent to living in fool’s paradise at this point.
Remarks that were not anticipated
Warning people about the debilitating cons of the cryptocurrency prominence, government officials tried to keep it fair and square with the people. The highly volatile & turbulent crypto market doesn’t spare anyone once it goes into massive losses. People lose millions in just a matter of seconds and hence, they should not be completely reliant on crypto to base their hopes on for a retirement plan. It is prudent to invest on platforms that are centrally regulated which can be resorted to in times of need, unlike the crypto industry where no one will be willing to entertain your grievances.
Conclusion
All said and done, the recent bold statement from the government was met with a mixed response from the overall population. Some hailed the decision of shunning the crypto dominance while others were let down seeing their crypto hopes perish all the way. Viewing cryptocurrencies as a legal tender of money is something that the Indian Government cannot rely on which makes it an endless debate among the users, investors, traders, and all the financial institutions.
