Ending Soon! Save 33% on All Access

2024 and Beyond: How is the Future of Cryptocurrency Looking Like? While the world moves towards becoming a Web3 citizen, India looks for government-friendly moves

By Paromita Gupta

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

(L-R) Avinash Shekhar; Anuj Kumar Garg; Rahul Bhadoriya;; Dr. Sathvik Vishwanath; Edul Patel; and Saurav Raaj

In less than 15 days, the world will see the fourth Halving event of Bitcoin. With this, Bitcoin's supply growth will be cut by half, shooting up an already comfortable crypto price. The year 2024 so far has been good to the ecosystem with BTC ETF approval and Bitcoin touching an all-time high.

While the world moves towards becoming a Web3 citizen, India looks for government-friendly moves. The ecosystem was optimistic for a TDS review during the budget but went in vain. "We are discussing with the government at various levels, trying to explain to them why these taxations are in fact counterproductive to what the government is trying to achieve, what the industry is trying to achieve, and why this is leading to innovation going out of India," shares Avinash Shekhar CEO and Co-Founder, Pi42.

During the 2022 Union Budget, the government imposed a one per cent TDS (tax deducted at source) on the buying and selling of VDA under Section 194S of the Income-tax Act, 1961. In March, Union Finance Minister Nirmala Sitharaman made the government's stand clear on crypto, "We haven't regulated them even now. But they cannot be currencies is what I've always held, and that's the government of India's position. Currencies are to be issued with the fear of the government or the central bank, so that is a different story." However, India raised the concern at the G20 and hopes a framework comes into play.

But Edul Patel of Mudrex feels there is another reason why traders are opting to go outside, "TDS is one reason why a lot of traders go outside. But in reality, a lot of users also go outside just because the quality of service and product is better. The real way to get users back is to give them high-quality products and service experience." Since February 2022, over 3-5 million Indian users have shifted base to offshore platforms.

Operating in the crypto ecosystem has its fair share of advantages and challenges. As of H12022, there are 450+ Total number of Web3 startups in India. "Innovation is one part of it and legality is another part of it. So while you innovate, build wonderful products, please remain compliant," shares Anuj Kumar Garg, Vice President – Blockchain, ZebPay. Starting December 2023, India hit Binance and 8 other crypto platforms with show cause notice for non-compliance with anti-money laundering law. Apple and Google followed suit and withdrew at least three from its platforms.

There are more than 19 million crypto investors in India. Talking about whether there are different trends in comparison of South Asia and India, Jyotsna Hirdyani, South Asia Head, Bitget shares "I do think there are certain fundamental differences in Indian user behaviour versus Asian user behaviour overall. For example, Indian users are very risk averse." The majority of crypto investors in the country fell in the age groups of 18-25 (45 per cent) and 26-35 (34 per cent) last year.

While the ecosystem players are hopeful for a positive move in the interim budget, Sathvik Vishwanath, Founder and CEO, Unocoin feels that while the government is specifically asking for more tax and higher TDS, then what is that they are getting back in return? "People compare with the gambling taxes where it's very hard to educate the people or to make them understand that crypto taxation is different than gaming. And as we know, crypto taxation has become very challenging. So I believe there should be some significant or some competitive taxation rules," shares Rahul Bhadoriya, Founder and CEO, ESP Softtech and Co-Founder, Mr. Mint.

So, where can we expect crypto to be in next 5-10 years? Saurav Raaj, Founder and CEO, Tokenize feels that as India is a hub for financial innovation, "I mean, the UPI and everything that has happened, we are way ahead of the world in that sense. And I believe the biggest of the crypto innovations, or web three innovations, will come from India as well." He further shares that when you put these two together and take it onto different asset classes such as asset trading and trading of unlisted startups, you can create an enormous innovation opportunity for every individual. Patel shares "We'll see multiple global companies building in India that are solving problems for users in this space, which will not necessarily only be exchanges or trading platforms, but actual use cases."

Shekhar feels in the next five to ten years crypto and blockchain will be bigger than the Internet at its peak.

"We were expecting the bullish year to be the next year, but it looks like it has started a little sooner," concludes Dr Vishwanath. At present, Bitcoin trades over USD 70,000 and is expected to cross USD 100,000 this year, while Ethereum sits a bit over USD 3,600.

(The opinions were expressed at Entrepreneur India's Tech and Innovation and W3 Summit 2024)

Paromita Gupta

Features Writer with Entrepreneur India

Covering news and trends in AI and Metaverse segments. An avid book reader running her personal blog on the side. You may reach me at paromita@entrepreneurindia.com. 
News and Trends

CoverSure and CirclePe Raise Early-Stage Funding

Here are the Indian startups that announced early-stage funding rounds.

Business News

'Creators Left So Much Money on the Table': Kickstarter's CEO Reveals the Story Behind the Company's Biggest Changes in 15 Years

In an interview with Entrepreneur, Kickstarter CEO Everette Taylor explains the decision-making behind the changes, how he approaches leading Kickstarter, and his advice for future CEOs.

Business Culture

How To Keep an Entrepreneurial Spirit Alive in Your Small Business

These three tips will help you keep the spark for entrepreneurship that leads to long-term business success

Business Models

How to Become an AI-Centric Business (and Why It's Crucial for Long-Term Success)

Learn the essential steps to integrate AI at the core of your operations and stay competitive in an ever-evolving landscape.