“BWA Urges FM Nirmala Sitharaman to Ensure a Fair Platform for Web3 Businesses”
The BWA is worried that a delay in India’s development of a thriving ecosystem for Web3 could result in the country missing out on lucrative and technical opportunities.
The Bharat Web3 Association (BWA), India’s independent advisory body for Web3, has conveyed a message to Nirmala Sitharaman, who has resumed her role as the nation’s finance minister for a second term this month. In the message shared with Gadgets360, the BWA emphasized the need for India to establish a fair playing field for Web3 startups and businesses to prosper. Currently, India is in the process of formulating regulations to govern the Web3 sector. The objective is to ensure that India’s cryptocurrency ecosystem is shielded against the financial risks associated with volatile digital assets.
Web3 needs Government support, BWA says
The BWA, comprising 36 members from India’s crypto industry, has collaborated with lawmakers to assist in drafting suitable rules and regulations to govern the digital assets sector, ensuring its growth is not hindered.
With Sitharaman’s return and the anticipated presentation of the finalized Union Budget 2024 in the coming days, the BWA has resolved to draw attention to the needs of the Web3 sector.
“The Web3 sector holds significant potential to revolutionize various industries, including finance, governance, and supply chain management, while also improving transparency and efficiency. In light of this, we recommend the government to establish a clear regulatory framework for Web3, support virtual digital asset (VDA) providers in prioritizing customer service, and streamline the taxation framework for the digital assets sector,” stated Dilip Chenoy, the Chairperson of the BWA.
The BWA stressed the utmost importance of providing Web3 services with access to banking services. Additionally, the advisory body has urged the government to promote investment and growth in the Web3 sector. The BWA and its members are concerned that if India delays the establishment of a lucrative ecosystem for Web3 growth, it could miss out on profitable and technical opportunities, similar to what occurred during the Web2 era.
India’s current position on Web3
Between 2022 and 2024, India implemented several significant decisions regarding Web3 regulations. Starting from July 2021, India introduced a tax regime for crypto gains. Crypto incomes in India are subject to a 30 percent tax rate, while a one percent TDS is deducted from each crypto transaction. The country has also brought the crypto sector under the Prevention of Money Laundering Act, which mandates all virtual digital asset providers to collect KYC details from their customers and report any identified suspicious activity to the relevant authorities.
During December 2022 and 2023, India held the presidency of the G20 group of nations. As part of its presidency, India collaborated with the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to develop crypto regulations that would be applicable uniformly on a global scale.
Despite India’s cautious approach in fully embracing the Web3 sector as a part of its financial and industrial ecosystem, the country has exhibited remarkable growth in blockchain adoption in 2023, according to a report published by Hashed Emergent, a Web3 venture capital firm focused on India.
According to the report, India’s global share of the blockchain developer pool rose significantly from three percent in 2018 to 12 percent last year. The country also reportedly secured the top spot for on-chain adoption in 2023 among 150 countries, with over 35 million trading accounts on the top Indian exchanges. The report predicts that India has a promising future in establishing itself as a leader and early adopter of Web3 technologies, primarily due to its large pool of developers.
While the crypto community in India is hopeful that Sitharaman will reduce crypto taxes, the finance minister has not yet addressed the sector’s requests.
