Q/Once the government’s digital currency comes in, will cryptocurrencies decline?
A/One thing everyone needs to get clear and [over which] there is still a lot of confusion [is that] both are independent. The CBDC is a digital version of the rupee on the blockchain, and crypto assets have different use cases. There is no competition, there is just a common underlying technology—blockchain. Both go hand in hand. In fact, as they get popular, the adoption of blockchain technology will also go up. If CBDC gets popular, so will crypto.
Q/After the budget announced a digital currency and took cognisance of cryptocurrency with a 30 per cent tax, is the glass half-full or half-empty?
A/It’s a great step. At least there is no scope for ambiguity. People were not clear and that was preventing a lot of investors from coming into the market. At least, now there is going to be standardisation. But the flat 30 per cent tax could push a lot of retail customers who looked at crypto as a portfolio investment to move out. Secondly, early tech adopters could shift base—you might see a brain drain, with startups also moving out of the country.
Globally, many countries are coming up with pro-crypto legislation, so that they become crypto hubs and get the advantage. But, if in India you are going to tax it on the same levels as betting or gambling, it is going to affect the industry in the long run. Crypto is a new technology [that] can add a lot of value to the country’s GDP. A lot of innovations can happen from it and it can create employment opportunities. India can become a technology powerhouse, if you build the right policy framework.
Q/Do you feel there is progress?
A/Some progress has been made. But we are not privy to detailed information on what the government is thinking. Nobody has yet seen the draft of the bill. The sense that we are getting is that the government has become more open. But to what extent, nobody has any idea.