Budget 2022: Crypto startups seek clarity of operations from govt in Budget 2022

Synopsis

They are keen for Sitharaman to acknowledge the potential of the industry and frame some clarity of operations to aid their operations and growth in the future

Startups expect the government to take a progressive stanceBudget 2022: Complete CoverageBudget 2022: Complete CoverageNEW DELHI: Crypto assets and blockchain are no longer a nascent fad for investors or the government. The number of homegrown startups engaged in the sectors is rising exponentially, despite regulatory uncertainties.

The startups and the new age companies associated with the industry are seeking clarity from Finance Minister Nirmala Sitharaman in the upcoming Union Budget over issues like taxation, legislation, exemptions and regulations.

They are keen for Sitharaman to acknowledge the potential of the industry and frame some clarity of operations to aid their operations and growth in the future. The Finance Minister will table the Union Budget of February 1.
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With more than 15 million crypto investors, India has emerged as the second largest global player in terms of crypto adoption, followed by a massive rise in NFT space and other startups.

The crypto industry has witnessed unparalleled growth in India, and the country is positioned to achieve global leadership if we ride the wave, said Amit Nayak – Co-Founder, CEO – SahiCoin.

Blockchain and crypto companies believe that India has the potential to emerge as a big player in the crypto market, being the youngest nation with huge startup growth prospects.

“We believe and expect the government to take a progressive stance and help put in place a framework for large scale adoption, security, and responsible investing,” Nayak said.

There has been a continuous debate of the regularisation of the crypto assets in India for quite a long time, with the centre mulling for a bill for the future course of actions, which now has taken a back seat for the time being.

It would be a great idea to align some budget towards introducing blockchain technology at educational institutions and beginning R&D for use-cases where this tech could assist the government, said the industry players.

Dileep Seinberg, Founder and CEO, Thinkchain, a blockchain and crypto consulting firm, said, “Momentum in crypto ventures and investments has risen significantly in 2021. We will see similar growth and more investments in crypto space.”

As of now, there are crypto or blockchain startups receiving investment from three avenues- institutional and angel investors who invest in a crypto venture; new crypto enthusiasts or the crypto-preneurs; and the big crypto investors.

“Our bill should be pro for the community that can enrich and provide fuel to the crypto community that will welcome more people into the space,” Seinberg added.

Taxation will be a critical step for the crypto industry as an inclusive approach by the government will make India a key destination for the new startups as well.

Ajay Dhillon, Chief Business Officer, Wall App, a Web3 NFT startup said that the government has been focusing to boost the startup ecosystem in India, unfortunately the same can’t be said about the blockchain or crypto space.

“The lack of regulation is a big problem not just for the entrepreneurs and traders in the Web 3.0 world, it would also have long term adverse effects on the government earnings and our nation as a whole,” he added.

Web3 is in its infancy and there will be a lot of development in the next 20 years where blockchain is the most important part of this upcoming tech revolution.

Even though implementing taxes on crypto can prove to be quite challenging, it is something that the government should aim to achieve at the earliest to boost government earnings.

“A good way to start could be introducing a low tax slab for voluntary declarations around this space as well as subsidies on income tax for new startup’s operating in this space,” said Dhillon.

Echoing the similar views, Sienberg said that fair taxation on the technology should be levied in the budget 2022, which may evolve the tax system for the future.

Barring this, industry players are seeking for a clear taxation system over the income earned from the crypto-assets and implementation of GST rules on the trading platforms, which will guide the market the way ahead.

Micky Irons, Chief Marketing Officer, DeSpace, a blockchain platform said that to cater the new-age technology and benefit the Indian masses, the government should act fast and set up norms with a regulatory body to overlook them.
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Updated: 01/20/2022 — 03:00