As Prime Minister Narendra Modi embarks on his third term, the Indian Web3 sector is calling on his administration to establish a clear policy framework for digital assets. This initiative aims to mitigate risks and encourage innovation within the burgeoning field.
Reaffirming her pivotal role in shaping India’s economic landscape, Prime Minister Modi has reappointed Nirmala Sitharaman as the Finance Minister. Her leadership is crucial, particularly in the areas of cryptocurrency regulation and taxation, as India navigates the complexities of integrating these new technologies into its financial system.
In a call to action, the industry body Bharat Web3 Association (BWA) appeals to India’s Finance Minister, Nirmala Sitharaman, for equitable regulations in the Web3 industry. Under the leadership of Chairman Dilip Chenoy, BWA highlights the sector’s potential in revolutionizing finance, governance, and more, and proposes key regulatory and fiscal reforms aimed at positioning India as a leader in this innovative technology frontier.
Dilip Chenoy, Chairman of Bharat Web3 Association, said: “Bharat Web3 Association (BWA) welcomes Smt. Nirmala Sitharaman’s second term as India’s Hon’ble Finance Minister.”
“During her extremely successful first term, India witnessed several reforms in the Indian financial sector. Hon’ble Minister displayed exemplary commitment and decisiveness in tackling issues around digital assets and the crypto assets market in India. India’s leadership during its G20 presidency paved way for a global coordinated approach to regulating crypto assets, given their cross-jurisdictional nature,” Mr. Chenoy added.
At BWA, we are deeply committed to contributing to India’s position as a leader in the next wave of technological innovation. We believe that the Web3 sector holds immense potential to revolutionize multiple sectors, including finance, governance, and supply chain management, enhancing transparency and efficiency, and under your continued leadership, the sector can significantly enhance India’s digital economy. Given this, we propose the following recommendations:
1. Development of a Clear Regulatory Framework for Web3
To ensure that India becomes a leader in the Web3 space and does not miss out on the opportunities as it did during the Web2 era. Establishing a globally coordinated and clear policy framework on digital assets is the need of the hour to mitigate risks and foster innovation.
2. Supporting VDA Service Providers in their Customer Focus
Streamlining the customer onboarding process and ensuring smooth operation of digital asset transactions, fostering trust in the digital asset market. BWA urges the new government to facilitate access to Central – Know Your Customer (C-KYC) for Virtual Asset Service Providers (VASPs) and the provision of banking services.
3. Rationalizing Taxation Framework for the VDA Sector
In order to provide a more favourable and equitable tax environment, encouraging investment and growth in the sector. BWA requests that the government should consider reducing the TDS on transfer of VDAs, allow offsetting of losses, and re- examine the flat rate of 30% on income from VDA transfers.
Dilip Chenoy, a seasoned Indian bureaucrat, author, and educationist, has held numerous high-ranking roles within both the Indian government and the private sector.
Last year, he assumed the role of the the first Chairman of the Bharat Web3 Association (BWA), a body aiming to spearhead the development of blockchain and cryptocurrency sector in India. Established in November 2022, BWA seeks to enhance collaboration among government entities, key industry stakeholders, and the burgeoning blockchain and crypto sectors, with the aim of advancing their growth and integration within the broader Indian economy.