Two years back, predicting the direction of crypto assets(Web3) in India was essentially guessing in the dark, plagued by deep-seated uncertainties. However, since then, there has been a significant shift in the industry outlook. Although the future of digital assets is still an unwritten story, several compelling reasons now contribute to a hopeful vision for the coming five years—a period expected to witness transformation, potential rapid expansion, and enhanced regulatory supervision.
India in the last five years has witnessed several regulatory changes in the crypto-asset sector. With the 1 percent TDS on every transaction and a 30 percent income tax rate on crypto income, the last few years have been turbulent for investors, traders, and the overall ecosystem. However, this has given the opportunity to homegrown crypto-asset companies to differentiate themselves, by becoming champions and stewards of the industry in India, by providing services to users and creating an ecosystem of a Web3 infrastructure in India.
The Indian government has taken a progressive step by incorporating crypto-asset service providers into the fold of the Prevention of Money Laundering Act (PMLA), marking a milestone in the sector’s legitimacy. Recently, The Financial Intelligence Unit (FIU) under the Finance Ministry issued show cause notices to nine offshore virtual digital assets platforms, like Binance and Kucoin, for non-compliance with anti-money laundering law. Additionally, FIU had asked MEITY to block the URLs associated with these nine entities, further emphasising the Indian government’s determination to curb any illicit activities related to digital assets.
Harnessing Web3’s Potential
Yet, there’s a misalignment within the Indian startup ecosystem, which often dismisses Web3 as mere “bitcoin and blockchain”, overlooking its broader scope. Contrasting this narrow view, Web3’s multifaceted nature is evident in the Maharashtra State Board of Skill Development (MSBSD) issuance of over 100,000 digital diplomas via blockchain, a leap in efficiency from the previous manual verification system.
