- India’s finance minister said that the government will thoroughly decide on crypto regulations in the country.
- The minister clarified that the government is open to blockchain and crypto.
- Crypto trading in Indian exchanges has taken a hit since the hefty crypto tax law.
Nirmala Sitharaman, India’s Finance Minister, said on Wednesday that the country will take a thorough look at regulations surrounding cryptocurrencies before an audience at Stanford University, amid citizens losing interest in the digital asset.
It will have to take its time…all of us to be sure that at least with a given available information [sic], we’re taking the decern decision. It can’t be rushed through.
Sitharaman stressed that the Indian government is open to innovations involving blockchain solutions. However, she explained that the country should first make sense of the technology.
“Our intention is in no way to hurt [blockchain and crypto innovations], assured the minister. “But [we need to] define [it] for ourselves.” She also added that this innovation also comes with risks, such as money laundering and terror financing, and that India is not alone in this plight.
Notably, India has been making headlines for its regulatory uncertainty, high crypto tax, and a central bank executive’s distrust of the digital asset. And just recently, the United Payment Interface (UPI) drama involving the National Payments Corporation of India (NPCI) has been added to the mix.
On top of these, local crypto exchanges are experiencing a liquidity crunch, with top Indian crypto exchange WazirX moving its headquarters to Dubai due to India’s hefty tax law.
“The overall enthusiasm and momentum of the crypto market in India [have] nearly died,” said CREBACO Global CEO Sidharth Sogani to BusinessToday. He based his claims on the low volume of crypto trading in the country.
Data from CREBACO suggests that crypto trading in Indian exchanges saw a huge dip after the tax law was implemented. WazirX trading volume plummeted to 57.79% as of April 27 since the law was carried out.
Despite some bullish trends in the market in the past month, CREBACO did not see the situation improve. “We were expecting the volume to revive but in spite [sic] of the attractive crypto market the volume has not come back,” added Sogani.
Sharat Chandra, EarthID’s VP of Research and Strategy and a crypto expert, offered the same sentiment. “The regulatory uncertainty and an informal squeeze on payment gateways and banking support for crypto have resulted in lower trading figures for exchanges,” said Chandra.
While builders of the crypto ecosystem will try to use their skills to contribute to the growth of crypto in India, these challenges will continue to plague the industry. Following the finance minister’s statements, will India be able to reverse the tides? Only time will tell.