Explained | Why are Indian Web 3.0 and DeFi projects moving to Dubai?

cnbctv18.com:

Within a month of the new tax regime coming into effect, crypto trading volumes in India have seen a massive downturn. The imposition of a 30 percent tax on capital gains coupled with a 1 percent TDS on all transactions has added immense pressure to India's already vexed crypto industry.Also, the debacle involving Coinbase and the National Payments Corporation of India (NPCI) has further fogged the regulatory situation.

Banks and payment aggregators are now unwilling to associate with crypto exchanges following this development.Faced with this regulatory blur and the stringent tax rules, several Indian crypto firms are now looking for friendlier locations to move base. It has kicked off a mass migration of Web 3,0 and DeFi firms to countries like Dubai, where the laws are pro-crypto and less hostile.

In fact, Dubai aims to position itself as a crypto hub in the Middle East region.The Indian legislation on cryptocurrencies was long anticipated. Despite the RBI's concerns surrounding cryptocurrencies, which it repeatedly vocalised, some investors remained optimistic about a favourable regime due to the sheer size of the Indian crypto market.

However, since the Union Budget 2022 was announced, most firms and investors have redirected their attention to more crypto-welcoming countries.MoneyControl attended Web 3.0 events held in Dubai in March 2022 and reported a stark change among the attendees. They observed majorly Indian businesspeople thronging the Binance Week & ETHDubai events.

"75 percent of the attendees were Indians. The others included Russians and Europeans," said Santhosh Panda, founder of Foundership, a mentorship and capital investment firm for Web 3.0 projects, to MoneyControl.Like Web 2.0 companies