While crypto investors and exchanges looked for the fine print in the proposal, some viewed the announcement as an indirect way to endorse crypto trade in India.
Industry executives said the budget announcement resulted in pent-up interest among risk-averse investors as well as companies who earlier feared the digital assets would be outlawed in India.
In a post-budget press conference, however, finance minister Nirmala Sitharaman clarified that “taxing does not automatically bring legitimacy.” It cannot be said that a ban or not of cryptocurrency is off the table, as consultations are still ongoing, she said.
Data from crypto firms WazirX, CoinSwitch Kuber and Unocoin showed a sharp increase in new users downloading the apps and completing the sign-up process on Tuesday, compared with Monday.
“The spike in sign-ups shows that the majority of people, especially corporates who have been sitting on the sidelines because of uncertainties, will now be able to participate in crypto. Overall, it’s a positive move for the industry,” said Nischal Shetty, chief executive of WazirX, which saw a more than 50% jump in sign-ups from a day earlier. “The tax clarity is a welcome move,” he said.
No Immediate Effects: Execs
“It is a huge relief to see that our government is adopting the progressive stance of going ahead in the direction of innovation,” said Shetty of WazirX.
On Tuesday, ET reported that the proposed tax rules – a 30% tax on gains and 1% tax deductible at source on every crypto transaction, with no concessions allowed – could hurt active traders in India. But industry executives said the effects of the proposal were not immediately apparent and would only become clear in the coming financial year.
“The negative impact in this case is not immediate as people have some time to respond to it,” said Sathvik Vishwanath, cofounder of Unocoin.
