How did the Indian Crypto Market perform in 2022?

Indian Crypto Market saw a wide acceptance of the Web3 potential as a whole, with Polygon joining hands with the Maharashtra government for caste certificates.

4 Jan 2023 | 7 min read

Table of Contents

Key Takeaways:

The Indian Crypto Market is yet to realize the potential it has in terms of becoming the leading crypto market.
Indian Crypto Market saw a wide acceptance of the Web3 potential as a whole, with Polygon joining hands with the Maharashtra government for caste certificates.

The year 2022 has been eventful for the crypto community! But this ecosystem has come at such a time, along with the technology that has helped build it that the supporters and the investors are simply sure it is here to stay. Since the inception of crypto and the Indian crypto market crash of 2018, a lot of speculations made its round where some were of the thought that crypto might not have a future in India. Similar to those speculations in 2022 we again went back to the same kind of discussions when the Indian Government decided to comment on the asset class. Cut to the Union Budget of 2022, the Indian crypto market 2022 now has a TDS in place, and we now have the crypto tax law with a 30% tax on the profits made. Thus, it is safe to say that the digital asset it not going anywhere.

To take a quick understanding of the progress in the crypto space on the Indian context, this article will be a recap of the crypto episodes of India in 2022.

The Crypto Bill News in 2021

To set the tone of the crypto market 2022, it is important to go back and recollect that the announcement of the crypto bill did play a role in the crypto investor’s sentiments as the media houses published news that narrated the news on the lines of the will leaning towards ‘banning the private crypto assets’. However, the government took interest in understanding the space further and with multiple discussions and minute slashing of the information from the media, we entered the year 2022 without much clarity on where the Indian Government stands for the future of the crypto market.

The interesting aspect of this situation is to see that the crypto exchanges and the seasoned investors were very positive on the way forward for the crypto market and had their trust on the government as well. Being a new sector, novice investors were worried about what the outcome will be. But the investors who had been in the space for a while knew that the government will take decisions that shall be in favor of the entire crypto industry in India.

The Union Budget of 2022

February 1, 2022, shall always be remembered in the Indian history of crypto. Why? Because while the government was mulling on a ban on crypto assets last year, this year it made it to the Union Budget and saved the dreams of millions of crypto believers and investors. India took a step towards central bank digital currency (CBDC) and shall introduce Digital Rupee. This step was taken to boost the digital economy of the largest economy in the world. The budget classifies every digital asset such as NFTs, cryptos, etc into a class called “Virtual digital assets”. The budget also lays down a plan to tax these virtual digital assets.

The Introduction of the Digital Rupee

Our Finance Minister Nirmala Sitharaman also announced that the Reserve Bank of India (RBI) shall also launch its digital rupee in the new financial year. This digital currency shall serve as the central bank digital currency (CBDC). The finance ministry believes that this introduction of CBDC shall provide a significant push to the digital economy and added that it will lead to a more cheaper and efficient currency management system.

Crypto Tax and TDS

In the Budget 2022, the Hon’ble Finance Minister Mrs. Nirmala Sitharaman had announced revolutionary changes to the virtual asset class. By taxing the assets, crypto has taken a massive step towards being regulated with proper structure in place.

Though there are still many discussions that the Indian Government is yet to have with the Indian mass regarding the regulations it will set for ‘Virtual Digital Assets’; according to the Budget 2022 session; these are the pointers any crypto investor should keep in mind:

Income from the transfer of virtual digital assets such as crypto and NFTs will be taxed at 30% at the end of each financial year.
No deduction, except the cost of acquisition, will be allowed while reporting income from the transfer of digital assets.
Loss from digital assets cannot be set off against any other income.
The gifting of digital assets will attract tax in the hands of the receiver. Losses incurred from one virtual digital currency cannot be set off against income from another digital currency. 1% TDS point should also be mentioned in this list of pointers as it was announced in Budget 2022.

Read more: Guide to 30% Crypto Tax

Polygon (MATIC) and The Maharashtra Government

Back in March 2022, as a part of the Digital India campaign, the government of Maharashtra took the initiative to start issuing caste certificates by making use of the Indian grown Polygon blockchain to citizens residing in Etapalli village, Gadchiroli district.

With this partnership, the Maharashtra state government has rolled out about 65000 caste certificates in order to aid the process of delivering governmental schemes and benefits. Indian government officials also started to acknowledge the power of blockchain and the revolution it is bringing with it. According to IAS officer Shubham Gupta, ” Web3 takes the concept of democratization to a whole new level, whereby, data/information can not only made openly sharable but can be made openly unfalsifiable.“

For the first time in 🇮🇳 65000 caste certificates have been issued on @0xPolygon network by the Maharashrta government.

A big thank you to @MartisNeil founder @LegitDocIndia for convincing and executing the project.

Thank you to our Young dynamic IAS officer @ShubhamGupta_11 pic.twitter.com/t00BZgWlrD

— Kashif Raza (@simplykashif) March 28, 2022

India and Web3

Taking the initiative for caste certificates, India has surely been one of the countries that have actively looked for ways to implement blockchain technology as it has adopted and is already planning to adopt blockchain technology further and across various sectors. Some of those are:

The Telecom Sector: The Telecom Regulatory Authority of India(TRAI) has instructed all telecom companies to start incorporating blockchain technology. The telecom companies believe that making use of blockchain technology apart from making use of Artificial Intelligence(AI) will assist them in eliminating most of the shortcomings of the telecom industry.
The Tea Board of India: The Tea Board of India has been in discussion to adopt blockchain technology. They are planning to do so in order to increase traceability functions across the entire supply chain. By adopting blockchain technology throughout the supply chain, it will help the sector in keeping a record at every step; this will also aid in increasing accountability along with getting rid of the problems.

Read more: Top Crypto Partnerships

UNFOLD 2022 by CoinDCX

Taking the Web3 adoption and its wide application across the country, CoinDCX organized the largest Web3 conference in India. Started on 26 August 2022, the UNFOLD was a first of its kind, where not only speakers from around the Web3 ecosystem came together but also was the event that was the first to see the launch of DeFi! Along with CoinDCX, YourStory, India’s leading startup platform, Devfolio, hackathon experts, and Buidlers Tribe, Web3 native incubators had also joined hands and were busy curating a memorable event that every participant found unique!

Conclusion

This was just the beginning! India has a lot of potential to grow in this space and with the G20 presidency being hosted by India would probably have a lot more information on the future of crypto in India and all around the world. Keep an eye out on Crypto News, where we will be bringing you the most important updates on the Crypto Markets!