Nirmala Sitharaman, the finance minister of India, has proposed a common framework for G20 countries to deal with crypto.
India has the presidency for the G20 Summit this year, and cryptocurrencies are a very important part of the discussion.
Sitharaman told the Peterson Institute for International Economics meeting in Washington D.C., “Given so many collapses and shocks in cryptocurrencies, we seek to develop a common framework for all countries to deal with this matter.”
India to Create Global Policy Approach Towards Crypto Assets
Sitharaman stated that India is working step by step to create a global policy approach towards crypto assets and regulation. During the G20 Spring meeting, side events are proposed for crypto assets in Washington.
During the July meetings, the country also wants to discuss the Financial Stability Board’s (FSB) paper on crypto regulation.
Indian Tax Regime Impacts Crypto
The government proposed a 1% Tax Deduction at Source (TDS) on every crypto transaction and a flat 30% tax on the profits of virtual digital assets in February 2022. BeInCrypto reported that India collected Rs 157.9 crore ($19.2 million) in TDS for FY2022-23.
However, the high taxes have severely impacted the Indian crypto ecosystem. According to a dYdX Foundation survey, “44% of users have reduced transactions on centralized and decentralized platforms after the tax on digital asset trading and TDS.”
Also, “The majority (60%) of Indian Web3 startups are registered outside of India, indicating potential tax and regulatory uncertainty.”
Indian crypto enthusiasts fear the country is driving innovation away with its strict crypto taxing policy. But the country’s minister of information technology says that the government does not want to stifle innovation. They want to safeguard security and intelligence objectives while ensuring ease of doing business and living.
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