Budget 2022 announcements booster for cryptocurrency sector

In Union Budget 2022, Finance Minister Nirmala Sitharaman’s move to tax cryptocurrency at 30 percent has cheered many.

Bhagaban Behera, CEO and Co-Founder of Defy shares his thoughts on cryptocurrency

India took a step closer to adopting cryptocurrencies after years of uncertainty. By taxing virtual digital assets, the government has taken the first step towards legalisation of crypto and blockchain ecosystem, which gives much-needed clarity and confidence to the industry.

This will pave the way to address misconceptions around crypto-assets and move towards classifying them as a separate asset class.

Finance Minister Nirmala Sitharaman's announcement has boosted the morale of the industry, and although levying 30 percent tax on capital gains is high, many retail investors who were on the fence will start considering investing in virtual digital assets.

Investing in virtual digital assets has associated risks and rewards - so we advise retail investors to educate themselves and invest in virtual digital assets that they understand and believe in.

There are several advantages of investing in virtual digital assets--they are transparent and secureowing to them being open-sourced and decentralised.

Retail investors should invest in digital assets with trusted exchanges and platforms and stay away from get-rich-quick scams. Investors need to be well-researched, they should have basic awareness about the functions and underlying technology of the coin that they are buying.

Coins that have been there for a long time or have a utility such as Bitcoin, Ethereum have better value and are therefore more popular to invest in.

The steps to go about investing in cryptocurrencies is fairly simple and are the following:

· Select a trusted Indian crypto exchange platform, where you can easily buy and sell digital currency with Rupees

· Register on the platform and complete your KYC. The process is similar to that of a bank, KYC will be done, where relevant documents need to be shared such as PAN Card, photo identity, etc

· Fund your Account, where the retail investor will have to transfer Rupees into the crypto-trading account

· Research about the Crypto you want to invest in and purchase it from the exchange.

With the Budget announcement, I am hopeful that more investors will start looking at digital assets as an investment option. This announcement has removed ambiguity about a potential ban of virtual digital assets in India and has legitimised the industry.

This is a positive development and is the right step in positioning India as a forward-looking force when it comes to Web 3.0 development. I truly believe the Crypto and Blockchain industry is primed for growth in the near future.

Published on: Friday, February 04, 2022, 11:45 AM IST