The Indian government, which has historically been opposed to crypto, is reviewing its regulatory policy in response to adoption by other nation-states.
According to Reuters, India’s economic affairs secretary, Ajay Seth, said that digital assets “Don’t believe in borders” — signaling that India does not want to get left behind in the digital asset revolution.
News of a potential policy shift came amid a new tax of up to 70% on previously undisclosed crypto gains as part of India’s Income Tax Act.
The government’s changing stance reflects the high-level game theory posited by pro-crypto analysts and Bitcoin maximalists that nation-state adoption by one or two countries would trigger a race among global powers to accumulate digital currencies.
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India pushes punitive taxes and central bank digital currencies
The government of India currently levies a 30% capital gains tax on digital assets, with no distinction between gains made from long-term investment or short-term trading.
Amit Kumar Gupta, a legal practitioner at the Supreme Court of India, characterized the taxes as draconian and an attempt to disincentivize the development of permissionless blockchain technology.
Gupta added that the Indian government views cryptocurrencies as “Worse than gambling” and told Cointelegraph:
“Their stance is that we are not going to use or allow anyone to use cryptocurrency because this technology is only for money laundering and terror funding — these kinds of activities.”
Shaktikanta Das, the former governor of the Reserve Bank of India, praised the central bank’s rollout of a central bank digital currency (CBDC) pilot program.
Das called CBDCs “The future of currency” and said the country is shifting toward a CBDC-driven economy in a December 2024 farewell speech.
Shortly before Das’ departure, the Reserve Bank of India (RBI) announced plans to expand its cross-border payment platform in November 2024 by seeking additional trading partners.
The bank is exploring CBDCs as the primary settlement mechanism between countries using the cross-border payment platform, which will likely come in the form of a wholesale CBDC.
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