While India struggles to find a regulatory balance in the domestic crypto market, venture capitalists and some global industry players have been bullish about the country’s future in the sector. In a recent interview, Leon Foong, Head of APAC at Binance explained why India is taking the center stage for crypto investments.
Foong told Indian Express, “Blockchain startups are what garnered the attention of Binance and many global tech experts and investors in India,”
He also believes that India has an edge on the tech front. The executive added, “We saw India’s technology venture capital investment grow almost three-fold to $44.6 billion in 2021. If the right blockchain entrepreneurs can be matched with talent and capital, we will see an acceleration in the number of crypto and Web 3 projects that are built out of India.”
That said, Foong believes that “a clear, progressive, and pro-innovation regulatory framework is necessary” to pour investment into the sector.
Existing investment interest in India
Galaxy Digital Research noted earlier this month that the crypto startups in India have attracted record investments of over $10 billion during the first quarter of 2022. And if recent reports are to be believed, venture capital firm a16z is also planning to invest around $500 million in Indian startups, ranging from seed rounds to late-stage funding.
Additionally, as per the April 2022 Finder’s report cited by the Times of India, India also topped the global cryptocurrency adoption index.
But, since the start of the financial year, Indians have also been paying a 30% tax on crypto gains with an upcoming liability of a TDS or tax deducted at source, applicable from July 2022. While the heavy taxation had deterred domestic trading interest, an indirect tax liability via GST is also reportedly under discussion as additional liability.
Adoption, ownership, and regulations
Apart from taxation legislation, there is no clarity on India’s regulatory framework around virtual digital assets.
However, according to Foong, “Ultimately when the pie is big enough and the Web 3 industry starts generating a large number of jobs and economic benefits, the multiplier effects from the industry can flow into the economy and ultimately boost the GDP of India,”
Against the global average of almost 15% of the surveyed countries, India’s crypto ownership rate is almost double, the latest Finder’s report had found.
The survey also revealed that India’s crypto adoption has been on a rise since November 2021. The report highlighted that the ownership of cryptocurrencies has increased by 61.6 million with 286.2 million internet users owning cryptocurrencies in April, as against January.
And along with large investor interest, the Head of Binance APAC commented, “With further investments from global crypto players and the exponential growth of local layer 2 projects such as Polygon, we see tremendous opportunity for more Indian founders to build quality projects,”
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.