As we near the first budget presentation of the returning NDA government, people and entrepreneurs from all sections will have their wishlists. One industry that would be especially tuned in is the crypto Industry.
We sat down with CoinDCX CEO Sumit Gupta to talk about his expectations from the budget and the future of the industry going forward.
Budget Expectations
We asked Gupta his perspective on what would the crypto industry want to see in the budget and more importantly what it hopes will not feature in the budget.
“This is an emerging technology, everyone believes in the potential of Blockchain but having a taxation framework that essentially discourages anyone from even touching this asset class and not leveraging the potential of Web 3 is going to have a long-term negative impact,” Gupta said.
He further said that the community would like to see a “more balanced taxation framework.” Gupta thinks that crypto assets should be treated similarly to equities. “You have stocks on one side and then you have crypto on another side, the properties are similar, the risks are similar, so the treatment should also be similar,” the CEO told Benzinga India.
He argued that the absence of such a framework would deter companies from adopting Web 3. Another ask of Gupta is to increase industry consultation.
He said consultation happens “but working out a structure where industry and the government come together, discuss the pain points and then come up with a regulatory framework which balances things would be important.” He thinks that such consultation would help prepare everyone better “as technology moves very fast and if we set rigid regulations right now, they may not be even relevant one year, or two years down the line.”
Lastly, Gupta said that clear regulations are a thing that the industry would like to see in this budget. “The right regulatory framework is something that is going to be a billion-dollar problem or rather a trillion-dollar problem to solve because the industry can add $1.1 trillion to the country’s economy over the next 10 years. But if we don’t solve it, and if we sort of kill it prematurely, then all of that value will not be captured by India,” Gupta added.
Impact Of Regulatations
The last year has seen two major changes being introduced in the crypto industry. The first was the declaration of TDS on crypto assets, and the second was the curbs on international crypto exchanges. We asked Gupta about the impact these regulations had on the company’s journey and the industry at large.
“I believe regulations are a good thing. It helps in the balanced development of the markets. But regulations have to be progressive. So both the developments that have happened, in my opinion, are good for the industry, good for the ecosystem,” Gupta said. He adds that it is better to have some sort of taxation than to have no framework in place.
He, however, added that when the announcement was made, “the volumes fell suddenly because the taxation is on the higher side. In fact, for a lot of people, it makes investing in this new asset class less attractive. I think that was not the best way to structure the taxation.”
“When international exchanges got banned or they were asked to get a registration, that is great for customers because then every player who is serving them, they have some supervision from a government authority. So the probability of something going wrong goes down.”
Acquisitions
Earlier in the year, the company announced the acquisition of BitOasis, a digital asset trading platform operating in the Middle East and North Africa. We asked Gupta about the story behind the acquisition and plans for the company’s expansion.
“We invested in BitOasis right around 12 months back — it was for a minority stake. We saw the progress of the company, it showed great performance, it was profitable, and was also the market leader. So all of those things gave us good conviction that, ok, this is the company that we want to back.”
He added that BitOasis will continue to operate with its current and existing team with the support and learnings of CoinDCX. “The brand will also continue as is and we will continue to look at the MENA market under the BitOasis brand, of course, housed under a common group,” Gupta added.
When asked if the company has any other plans to expand to newer regions, Gupta said that the company has been eyeing a few markets. “Some of the regions that we have identified, and are seriously looking at are Turkey, then Europe is interesting, Southeast Asia is also there, Australia is also a region we have an eye on but we are not looking to expand to all these places in one go, but in a more phased manner.”
Where Is The Industry Headed?
We asked the founder what are some of the changes he thinks the industry will see over the coming years. He replied, “One is that institutional money would come into the sector and make it part of the mainstream. For example, if an institution has $100 million in assets under management, part of that will be deployed into Bitcoin or some other top crypto asset. So institutions adopting this asset class is one big theme that will come out over the next one or two years.
The second theme as I mentioned is the regulations and it is not going to happen five years down the line, it is starting now.” He adds that slowly every country will be coming out with clear regulations for the space and that would help establish the industry in the mainstream.
“The other broad theme I feel will happen is that you will see more Blockchain-based applications coming and not everyone will become an Amazon or Facebook. But you will see some early successes,” the founder added.
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