Indian government's ‘blockchain not crypto’ stance highlights lack of understanding

cointelegraph.com:

Indian crypto businesses are struggling with the new tax policies as trading volumes have dried up and many established crypto firms are looking to relocate to more crypto-friendly jurisdictions.

While many developed countries and even several of its Asian counterparts are actively studying and formulating better crypto regulations, the Indian government has maintained a “blockchain, not crypto” stance.

It might seem like the government is taking a cautionary step to focus on the underlying technology while keeping its distance from the volatile and risky crypto market. However, going by the recent policies and statements from the finance minister as well as sitting parliamentarians, the issue seems to be more of a lack of understanding.

The newly introduced crypto tax laws, for example, are highly motivated by the country’s gambling laws and were introduced and passed hurriedly without any input from the stakeholders in the ecosystem. As many crypto pundits have warned, the harsh tax policy has driven traders away from Indian exchanges.

Many ministers in the ruling government have propagated false narratives against crypto without offering any evidence to back their claims. Sushil Kumar Modi, a member of parliament from the ruling party, has compared crypto to “pure gambling” and called to “impose more tax on it so that the government can get revenue and people can be discouraged from investing in this volatile asset.”

The statement is a clear example not only of a lack of understanding but of a contradiction, in that he is talking about discouraging people from investing in crypto while believing it would bring more revenue to the government.

Sathvik Vishwanath, co-founder and CEO of Indian crypto exchange Unocoin, told