India, as a nation, has been quite open and accepting of various technological changes. While every major change has seen some opposition in the early days, the country eventually adapts these changes for the greater good. This commentary isn’t limited to India because we as humans are by nature, resistant to change. Blockchain and cryptocurrency technologies are bringing in a major change in the way the Indian Fin-Tech industry functions – and there have been mixed reactions.
Before we proceed into the details, it is essential to understand that the blockchain systems are the underlying technology that power cryptocurrencies. The blockchain is the actual technology and cryptocurrencies are a byproduct of that technology. However, both of them put together have a major impact on the Fin-Tech industry. While cryptocurrencies are bringing in a Finance-revolution, the blockchain technology brings in a tech revolution.
Global governments have had various outlooks towards these two technologies. While neighboring China is quite hostile when it comes to cryptocurrencies, India’s stance is quite neutral. As of this moment , the government has not issued any harsh directives, but has been slowly cracking down on cryptocurrency traders and cryptocurrency platforms.
Cryptocurrencies in India: Tax Authorities Treading Carefully
Reports have been emerging over the past few months that the Indian tax authority intends to go strict on crypto-trade in the nation. However, as of now, there’s no clarity and confusion prevails. Since December, the Indian tax authorities have been visiting offices of domestic cryptocurrency exchanges, understanding how they function as well as ensuring that there are no illegal trading practices in place.
Apart from visiting these cryptocurrency exchanges, the Indian tax watchdog authority has also been issuing summons to various cryptocurrency traders who have been dealing in high value transactions. Those summoned by the tax bodies have been asked to bring along their tax statements of the past few years, as well as disclose complete cryptocurrency investments.
Number of cryptocurrency related scams and fraudulent pyramid schemes have been on a rise globally and India is no exception. There are a number of Indian cryptocurrency scammers and Ponzi schemes which are setting up their trap to lure unsuspecting investors. Many new investors are susceptible to these scams and Ponzi schemes as they believe that investing into these platforms would get them multi-fold return, whereas, in reality, these companies tend to run away with their money. Novice investors are best advised to read up detailed cryptocurrency guides to understand the crypto-trade better.
Indian Finance Minister Arun Jaitley commented on cryptocurrencies during the 2018-19 Budget, stating that “Cryptocurrencies are not a legal tender in India”. This wasn’t the first time that he made this statement, but considering that this was the day of the Union Budget, it got a lot of attention in the media – resulting in price in certain Indian cryptocurrency exchanges dropping to almost $4000!
Earlier this month, EthexIndia and BTCXIndia – two cryptocurrency exchanges owned by the same parent company shut down their operations citing government hostility and excessive regulations.
Trust In The Blockchain Technology
Despite India’s flip-flop stance on cryptocurrencies, the country continues to show faith in the blockchain technology. The Indian government holds a view similar to many eminent blockchain experts such as Vitalik Buterin who believe that in the long run, Blockchain is the innovation and Cryptocurrencies are just a by-product.
India has begun experimenting with blockchain technology over the past couple of months. A few weeks ago it was announced that certain universities in India would be awarding degrees to students which would be based on a blockchain system, ensuring the record stays permanent, publicly accessible, as well as tamper-proof and a government certified proof of education.
After this first step towards blockchain in governance with the education sector, India possibly eyes getting land records on blockchain ledgers. The State of Andhra Pradesh has been quite enthusiastic about this technology and has been aiming at making Visakhapatnam (Vizag) the blockchain capital of India. A number of state-government backed projects are taking place in the city, which is also the home to a number of blockchain events and conferences!
In a country where corruption continues to be a matter of national debates every night, blockchain technology could do wonders as it infuses a strong dose of transparency into the system. While India may not be so high on cryptocurrencies at the moment, the government’s attitude is very positive when it comes to the blockchain technology.
While Indians look forward to buy bitcoins as the prices continue to be low, the government is working towards implementing blockchain in various sectors. Indian Prime Minister Narendra Modi had tweeted a few days ago stating “Disruptive technologies such as Block-chain and the Internet of Things, will have a profound impact in the way we live and work. They will require rapid adaptation in our workplaces.”