Indian cryptocurrency trading platform Unocoin's chief has opposed the government's idea of imposing an additional 28% tax on digital coins, saying the move would drive investors out of the country.
What Happened: In an exclusive conversation with Benzinga, the CEO and the co-founder of India's oldest cryptocurrency trading platform, Sathvik Vishwanath, said, "The 28% [GST tax on cryptocurrency] is not going to work anywhere. Even the 5% GST cannot be sustained."
He added that if the government "forcibly" tries to impose more taxes, it would end up "killing the market."
Reports indicate that the Narendra Modi-led government is now mulling a 28% GST on digital assets on top of an existing 30% income tax on profits earned from cryptocurrency trading.
Vishwanath said the implementation of more taxes will force investors to "move to other markets which are less tracked than what it is right now."
"They will still go with the crypto market but not within the country; they will try to establish entities outside the country and do the transactions. Even if they stay within the country, it will go towards the untracked markets, like transactions directly through cash."
'Government Needs Innovative Attitude'
The Indian government has had a hot-and-cold relationship with cryptocurrencies like Bitcoin BTC/USD, Ethereum ETH/USD, and Dogecoin DOGE/USD. For a long time, the country's regulatory bodies have been considering ways to control the use of digital assets but are waiting for a global consensus.
According to Vishwanath, the government needs an "innovative attitude" towards the sector so that India "doesn't lose out on employment, investment, and re-innovation opportunities that the industry is presenting."
"In the entire world, I don't think there was any country that was able to get it right in the first place. They somehow tried different regulations, and some discernment continues to happen," he said.
"In India, we are trying to get it right for the first time, which won't be happening. But it cannot be like, 'ok, let's declare it bad for the time being till we figure out what to do with it.' That doesn't work either."
American peer Coinbase Global Inc's COIN CEO Brian Armstrong has blamed India's central bank for putting "informal pressure" weeks after it halted trading service in the country.
Price Action: According to data from Benzinga Pro, Bitcoin was trading nearly 5% higher at $30,732 over the last 24 hours, while Ethereum was up almost 4% at $2,088.
Photo courtesy: Unocoin
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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