Crypto as a commodity: what does it mean for you and the industry?

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New Delhi: Government of India is considering defining cryptocurrency as an asset / commodity for all purposes including taxation and as per use cases such as payments, investments or utilities.

The Economic Times reported Thursday that the new bill the government has shaped proposes to compartmentalize virtual currencies based on their use cases.

The bill is expected to specify the tax treatment of the new asset class, which will be clearly classified in the law books.

It would be the first time that cryptocurrencies would be ranked based on the technology they use, but the focus of governments would be based on the end use of the asset class for regulatory purposes.

This move can be a morale booster for crypto investors, which will increase education, awareness, investment and acceptance of cryptocurrencies, industry watchers have said.

Industry and trade experts are positive on the development and welcome the government’s intentions. However, they are waiting for the bill for clarity on their concerns.

Here’s what industry and trade experts have to say:

Nischal Shetty, Founder and CEO of Wazir X, said categorization of crypto is key to having the right kind of regulation in India. Crypto is primarily categorized into four broad categories globally: asset, utility, currency, and security. “This step is very positive for the crypto industry and I am happy that the government is taking this direction towards the regulation of crypto,” he said.

“This will bring more clarity for the entire industry and push more entrepreneurs into this industry. It will reduce the fear of venture capitalists wanting to invest in the crypto industry in India. For retail investors. and traders, it will again build confidence and bring a sense of stability. The current regulatory uncertainty is not helping anyone. We look forward to this positive direction from the government, “he said.

Edul Patel, CEO and co-founder of Mudrex, said the government’s plan to draft a crypto bill that recognizes cryptocurrency as an asset is a giant step in the right direction. “Writing the crypto bill with careful attention and brainstorming could be a game-changer for the crypto industry in India,” he said.

“The idea of ​​compartmentalizing cryptos on their use cases is well thought out, and if implemented effectively, would be a significant boost for the newly recognized asset class. It also shows that the government recognizes that Cryptocurrencies are more than speculative instruments and have real use cases, “he said.

One of the most significant benefits of such an idea would be the increased awareness of retail investors. Such a project would help increase the participation of investors who are still hesitant to participate in the crypto market.

Hitesh Malviya, founder of itsblockchain.com, said cryptocurrencies are designed to serve different business use cases of blockchain technology. “It is a big step for the Indian government to recognize this and take action in categorizing cryptocurrencies. It is a mature and very thoughtful step on the part of the government,” he said. declared.

Categorizing cryptocurrencies will help investors understand the work and use cases of cryptocurrencies so that they can make the right investment decisions for themselves. This step will also protect investors from various cryptocurrency-related scams.

ZebPay co-CEO Avinash Shekhar said having a clear regulatory framework around cryptos will help investors, businesses and entrepreneurs to confidently participate in this industry. “We have been looking forward to the next government directives and policies. We hope that cryptos will be classified as an asset class and that there will be laws in place on their taxation, just like other financial markets,” a- he declared.

There are thousands of different cryptos on the market with different use cases that work on different blockchain platforms. “Were they sure that policymakers will consider how they can be used both as an asset class and leverage the underlying blockchains for their use cases to improve the infrastructure needs of the India in various sectors, ”he said.

Having clear laws will have a positive impact on investors. “Crypto assets are still in their infancy and with clear regulations, we hope to see more Indian investors come forward with confidence to take advantage of the benefits of an early market,” he said.

Vikram Subburaj, Co-Founder and CEO, Giottus Cryptocurrency Exchange hailed this government step. “Much like the internet, cryptocurrencies have a multitude of use cases and, therefore, a nuanced approach is preferable rather than a single policy. Even among the top 20 cryptocurrencies, there is a big difference in purpose and attractiveness to investors. ”he said.

“Just as India has separate laws governing e-commerce companies, social media companies, financial technology companies, and certain laws such as data privacy are applicable to all internet applications, we can have a basic law applicable to cryptocurrencies while compartmentalizing them by use case, “he said.

Subburaj said that only when the law is passed can it be identified which segments will benefit from it and which segments will not. “However, from a trade perspective, we are more than willing to implement the required changes as long as we get the clarity and timeframe to allow this,” he said.

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