India is to tax and regulate Bitcoin and crypto after previously considering a ban, which could be the next step towards making it legal tender in the country, suspects deVere Group CEO Nigel Green.
Green’s assessment comes as Indian Finance Minister Nirmala Sitharaman announced a 30 per cent tax on any income from the transfer of digital assets, a first for the nation.
“India, like many other countries, has come to the sensible conclusion that you cannot ban cryptocurrencies. It would have been a futile and backward-looking decision to do so,” Green said. “Borderless, digital currencies are unstoppable in our increasingly tech-driven, interconnected world – and the Indian authorities know this. Recognition of digital currencies by the world’s second most populous country and the world’s largest democracy is a landmark moment for cryptocurrencies.”
Green said the announcement’s clarity will shore up the crypto space and drive prices. He believes this will be the first step in India eventually adopting Bitcoin as legal tender.
Last month Green predicted another three countries will follow El Salvador’s example and make Bitcoin legal tender in 2022. When it happens a snowball effect will follow.
“Greater regulatory scrutiny must be championed as digital currencies, including Bitcoin, are set to play an ever greater role in the international financial system,” Green said. “What’s needed is a strong regulatory framework to be established and approved at an international level. Such regulation will help protect investors, tackle criminality, and reduce the possibility of disrupting global financial stability, as well as offering a potential long-term economic boost to those countries which introduce it.”
Green said the 30 per cent tax is too high and believes investors will not withdraw from government banks and instead look for other avenues such as selling on peer-to-peer platforms.
“India is edging toward making Bitcoin and cryptocurrencies legal tender,” Green concluded. “We can expect other major economies to copy India’s trajectory. This is bullish for prices.”