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2023: India blocks major crypto exchanges
On December 28, 2023, the financial intelligence unit of India (part of the Ministry of Finance) announced a decision to block the operation of the nine largest crypto exchanges in the country. Such venues do not comply with India's anti-money laundering law, authorities said in a statement.
The blacklist includes the platforms Binance, Kutoin, Huobi, Kraken, Gate.io, Bittrex, Bitsamp, Mexc Global and Bitfinex. The Ministry of Electronics and Information Technology of India received instructions to block the addresses of the listed crypto exchanges "until further orders." It is noted that in March 2023, cryptocurrencies were included in the system of combating money laundering and the financing of terrorism in India. By the end of 2023, 31 crypto sites had registered in this system. However, a number of overseas organisations, although serving a significant proportion of Indian users, are said to have failed to register.
 | Global cryptocurrency exchanges are required to comply with India's anti-money laundering regulations and cannot circumvent these requirements just because they have no physical presence in the country, India's Financial Intelligence Unit said in a statement. |  |
It is noted that many Indian traders switched to global cryptocurrency platforms, trying to evade taxes. The fact is that the country's authorities charge 30% on profits from transactions with digital currencies, and also receive a commission of 1% for each cryptocurrency transaction. At the same time, local laws lead to the fact that foreign crypto sites are cautiously developing business in the country. Thus, Binance founder Changpeng Zhao said in 2022 that the company is not interested in expanding in India, since the South Asian market has not created a cryptocurrency-friendly environment.[1]
2022
300 million people in India regularly transact in cryptocurrencies
India imposes 30% tax on cryptocurrency and NFT revenues
In mid-March 2022 India , it announced the introduction of taxes on income from cryptocurrencies and. NFT The country's Finance Minister Nirmala Sitharaman said income from any virtual assets would be taxed at 30%.
| | No deductions are allowed when calculating such income, except for acquisition costs. In addition, the loss from the transfer of a digital asset cannot be offset against any other income, Sitharaman notes. - Donation of a virtual digital asset is also proposed to be taxed by the recipient. | |
The innovation came amid the active penetration of cryptocurrencies and NFTs into the Indian market, as well as the growth of transactions with these assets, despite the uncertainty of regulation in the country.
The growing proliferation of crypto tokens has also led to a group of start-ups seeking innovation in the field, though their aggressive marketing campaigns have left authorities and locals angry.
Meanwhile, the Central Bank of India has been testing its CBDC for months as part of a series of controlled trials and has studied its impact on banking and monetary systems.
| | The introduction of the central bank's digital currency will give a big boost to the digital economy. The digital currency will also lead to a more efficient and cheaper currency management system, Sitharaman noted. | |
It is not yet known whether the introduction of taxation is a step towards recognizing India as cryptocurrency as legal tender or whether the authorities simply intend to charge part of the money from participants in the cryptocurrency sector. Co-founder and chief executive officer of the Vauld crypto exchange Darshan Batija argues that the introduction of the tax rate will make trading in cryptocurrency assets in the country official, as well as relieve any concerns about its ban.[2]
2021
Plan to issue state cryptocurrency
In Japan, a number of commercial firms are preparing, with the participation of the state, to create a single cryptocurrency DCJPY. The Central Bank of Japan promised to issue its own version of cryptocurrency. In India, it is planned not only to release state cryptocurrency, but to ban private crypto assets. This became known on November 26, 2021. Read more here.
Large cryptocurrency transfers over $10 million account for 42% of transactions
Demand for digital coins in India is contributing to the region spanning central and southern Asia and Oceania becoming one of the fastest growing cryptocurrency markets in the world, according to Chainalysis.
The growth rate here is the fastest since the Middle East and much of Europe, with India's market up 641% in 12 months and Pakistan up 711%.
"Large institutional transfers over cryptocurrencies $10 million account for 42% of transactions sent from Indian addresses, compared with 28% for Pakistan and 29% for Vietnam," the report said. "These figures suggest that Indian cryptocurrency investors are part of larger and more complex entities."
Surge in investment in cryptocurrencies
The manifesto of cryptocurrency fans that Bitcoin is equivalent to digital gold will win supporters among the world's largest holders of the precious metal in 2021.
In India, where households own more than 25,000 tons of gold, investments in cryptocurrencies have grown from $200 million to nearly $40 billion over the past year, according to Chainalysis. And this is despite the frankly hostile attitude towards this class of assets on the part of the Central Bank and the proposed ban on trade.
At the four largest crypto exchanges, daily trading volume rose to $102 million from $10.6 million a year ago, according to CoinGecko.
According to Chainalysis, the country's $40 billion market is still significantly behind China's $161 billion market.
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