Cryptocurrency in 2022: what was it, what is it and what to expect in 2023

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2022 has been an eventful year for cryptocurrency. Tighter monetary policy and geopolitical pressures led to a sell-off in the industry. Following hawkish comments from the Reserve Bank of India (RBI), the Indian government imposed a flat tax of 30% and an additional 1% withholding tax (TDS) on the transfer of crypto tokens in the budget of this year.

In addition to this, the RBI launched its own digital currency, Central Bank Digital Currency (CBDC) in 2022.

As the market began to stabilize in the second half of FY23, the collapse of FTX exacerbated the situation. Once the third largest crypto exchange, it took FTX just a few days to clear billions of dollars. The industry’s total market cap has fallen nearly $200 billion since the fraud surfaced in early November. Since the fallout, several exchanges have started publishing their evidence of reserves to allay investor fears.

Several other companies like Celsius, Three Arrows Capital and, more recently, Core Scientific filed for bankruptcy in 2022.

Overall, the year saw the bear hug in the crypto industry. Bitcoin, the largest cryptocurrency by market capitalization, was trading at $47,098 at the start of 2022. As of December 25, it had fallen to $16,880.

Business Standard spoke with various crypto firms in India about how 2023 will be for the industry.

WazirX: Nischal Shetty, CEO

“After the stock market crash of 2022, the whole community went into recovery mode – creating resilient and viable products, introducing measures to stay afloat, building secure infrastructure, etc. As we continue to see Long-term Crypto supporters HODL their assets, the market is also expected to recover soon. However, we will start to see silver linings towards the end of next year.

It will also be interesting to see how nations work together to classify digital assets, protect user interests, and foster a robust environment for cryptocurrency growth.

On the tax side, we have asked the government to reduce taxes on Crypto gains and withholding tax.”

CoinDCX: Minal Thukral, Executive Vice President of Growth and Strategy

“The crypto market is expected to consolidate over the next few quarters and derivatives play will drive volume growth as seen in the recent past. The ecosystem will continue to build over the long term. However, in 2023 , the liquidity crunch could cause disruptions in the institutional market that could end up locking up longer-term assets… Investors are likely to focus on high-quality assets that will bring more value.

Through our representation for the upcoming Union Budget 2023-24, we have suggested that the TDS rate be reduced to 0.01%.

CoinSwitch: Ashish Singhal, Co-Founder and CEO

“2022 has shown us that crypto regulation is not just about setting the tax rate. India needs to take a broader view of the impact of the rules set here on crypto customers and how they adapt to these changes.”

CoinSwitch: Parth Chaturvedi, Head of Crypto Ecosystem

“A coordinated global regulatory framework is the need of the hour, to protect users and industry players. India’s G20 Presidency is seen as a catalyst for the same and could be a great initiative to define the future direction of Web3 growth.”

Mudrex: Edul Patel, CEO and Co-Founder

“While this prolonged period of market downturn, sometimes referred to as ‘crypto winter’, may have tested the resolve of some investors, it has also presented opportunities for those committed to technology to continue to develop and innovate.. Despite facing challenges this year, the industry has made significant progress in improving transparency and security.As we enter the new year, it’s a great time for investors to review and strategize their portfolios to take advantage of potential opportunities.

KoinX: Punish Agarwal, Founder

“We are confident that over the coming year, crypto markets will rebound from current lows, citing the ease of inflation and the less hawkish policy stance of central banks around the world… With the next Union budget, we expect better clarification on the classification and taxation of these VDAs, and we also expect better crypto education.

MuffinPay: Dileep Seinberg, Founder and CEO

“The cryptocurrency industry is evolving from unorganized and unregulated to audited and regulated. As a result, projects with utility and value derived from real-world use cases will drive the industry forward…2023 is likely to be a year of growth and consolidation.The later part of the calendar ahead will see the emergence of new projects and potential signs of improving sentiment.

BuyUCoin: Shivam Thakral, CEO

“In 2023, we can expect favorable macroeconomic conditions as central banks have hinted at easing monetary policies and interest rates. Inflation will be a key factor in deciding the fate of financial markets going forward. across the world. The crypto market will overcome the collapse of crypto giants like FTX and move into a more mature phase with savvier investors and sound regulations.”

Liminal: Mahin Gupta, Founder

“A key learning from 2022 is that industry players have a responsibility to create a safety net around user funds. Self-custody or licensed custodian services should be actively used to store digital assets in which users have full control of their funds… We will see the evolution of institutional-grade infrastructure to meet regulatory, operational and compliance requirements while providing access to on-chain services, enabling interoperability across chains and helping organizations integrate digital assets into their business operations.”

Vantage: Marc Despallieres, Director of Strategy and Trading

“While the autonomy of the cryptocurrency has contributed to its rise in popularity, the uncontrolled environment in which it operates has had the opposite effect. Prices have gradually stabilized with the establishment of rules and regulations. actions taken to protect the interests of cryptocurrency users. However, because there is still a lot of ambiguity in this volatile market, investors active in this sector are still worried. The advent of India’s G20 Presidency could provide some level of clarification on tax and advisory standards.

Keywords: Anurag Dixit, founder

“2023 will be the year of cleaning up and structuring the remnants of faithless and mismanaged players left in the market. Resilient projects will continue to show outliers Intense global coordination on regulation and taxation will be two major themes playing out in 2023.”

UniFarm: Tarusha Mittal, COO and co-founder

“The collapse of FTX is good at the macro level for the industry, because users will realize once again that Web3 is about decentralization. Companies that don’t have a solid foundation and have large investments will be Only real business models The collapse of FTX is a good reminder that crypto is all about removing centralized bodies… The government should frame strict regulations for the sector in light of the FTX crisis, especially for centralized bodies dealing with cryptography.

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