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.
The bullish assessment from Nigel Green of deVere Group, one of the largest independent financial advisory, asset management and fintech organisations, comes as Indian Finance Minister Nirmala Sitharaman announced a 30% tax on any income from the transfer of digital assets, a first for the nation.
He says: “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.
“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.
“The clarity will further shore-up the crypto space and help drive prices.
“I’m confident that history will show that this is the first step to India adopting Bitcoin as legal tender in the future. It remains a long way off, but it’s certainly a step in that direction.”
At the beginning of the year, Nigel Green told the media that he believes that another three countries will follow El Salvador’s example and make Bitcoin legal tender in 2022.
“How many remains unclear, of course. But when it happens, it will be a snowball effect,” he noted.
A long-time and high-profile advocate of digital currencies, he has been a consistent voice on calling for regulation of the crypto market.
“Greater regulatory scrutiny must be championed as digital currencies, including Bitcoin, are set to play an ever greater role in the international financial system. 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.”
Regarding India’s 30% new tax on digital assets, Nigel Green says: “It’s too high. I imagine that many investors, to avoid the 30% tax, will not withdraw from government banks and will sell on peer-to-peer platforms, amongst other ways.”
He concludes: “India is edging toward making Bitcoin and cryptocurrencies legal tender. We can expect other major economies to copy India’s trajectory. This is bullish for prices.”
