India’s first step to making Bitcoin legal tender
After previously contemplating a ban, India is now planning to tax and regulate Bitcoin and crypto, which may well be the next step towards it becoming legal tender in the country.
India’s Finance Minister Nirmala Sitharaman announced the 30% tax on any income from the transfer of digital assets, which is a first for the country.
As I was quoted by Pound Sterling Live and The Korea Times, amongst other media, like many other nations, India has realised that a crypto ban is not the way forward. To do so would have been a fruitless decision. Why? Because borderless, digital currencies are inevitable in our ever more technology-driven, globalised world. Something the Indian authorities recognise.
As such, this digital currency recognition by India is a landmark moment for cryptocurrencies. And this clarity will serve to further bolster the crypto space and help drive prices.
I’m confident that in the future we’ll see this as the first step to India adopting Bitcoin as legal tender. Of course, there’s a long way to go yet, but it’s a step in the right direction.
I’ve said before that I believe another three countries will follow El Salvador’s example and make the world’s largest cryptocurrency legal tender this year. Naturally, we don’t know how many, but when it happens it will be a snowball effect.
In regard to crypto regulation, greater regulatory scrutiny should be welcomed with open arms, given that digital currencies will play an increasingly greater role in the global financial system. A robust regulatory framework is required, approved internationally.
Regulation will help to protect investors, reduce the chance of disruption to global financial stability, fight criminality and provide a potential long-term economic boost to those countries which implement it.
However, going back to India’s 30% tax on digital assets, I believe it’s too high. I would think many investors, to avoid the 30% tax, would avoid withdrawing from government banks and will sell on peer-to-peer platforms, amongst other ways.
India is moving towards making Bitcoin and cryptocurrencies legal tender, and we can expect to see other major economies follow suit, which is bullish for prices.