The Web3 industry calls for clearer regulations regarding cryptocurrency trading

The Bharat Web3 Association (BWA) is advocating for Web3 Recognition, Ease of Doing Business, Regulatory Clarity and Skill Development for the Web3 Sector. 

For the people unaware, The Bharat Web3 Association brings together prominent figures within India’s Web3 sphere, with the goal of utilizing blockchain and scalable technologies to expedite growth and transformation in the nation. Members of the association include infrastructure providers. The association’s membership encompasses infrastructure providers like Polygon, Virtual Digital Assets (VDA) exchanges such as WazirX, CoinDCX, Coinbase, and CoinSwitch, gaming platforms like Hike, and other key players in the Web3 space such as Liminal and Tax Nodes. This collection reflects the varied landscape of the Web3 ecosystem. BWA is dedicated to conducting research, raising awareness, establishing industry standards, protecting consumers’ interests, Fostering the Indian talent pool and Promoting stakeholder dialogue with the aim of cultivating a thriving Web3 ecosystem in India. 

The association aims to assist India realize it’s vision of becoming a leading digital economy. They promote cooperation between regulatory bodies and the industry to foster awareness regarding the new technological advancements and the emerging asset class.  

As the forthcoming Budget sets the stage for Viksit Bharat 2024, the BWA recommends the following initiatives to the government as part of its immediate action plan for sectoral growth:  

  • Over 80% of G20 members and financial hubs have provided regulatory clarity on crypto assets. Leveraging India’s leadership within the G20, there’s an immediate requirement for a globally coordinated, transparent policy framework on digital assets to manage risks and stimulate innovation. BWA recommends forming a panel to discuss as well as draft a model legislation in consultation with the industry. Besides this, they also propose within the initial 100 days, the release of a discussion paper detailing the diverse benefits, risks, and regulatory strategies tailored for India. 
  • Acknowledge and integrate the Web3 sector into startup initiatives supported by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Electronics and Information Technology (MeitY), and the office of the Principal Scientific Advisor (PSA), along with other pertinent departments. 
  • Enable Virtual Asset Service Providers (VASPs) to access E-KYC/C-KYC facilities, allowing them to fulfill their KYC compliance requirements and obligations under the Prevention of Money Laundering Act, 2002 (PMLA). This will streamline the customer onboarding process on our platforms. 
  • India hosts more than 1,000 Web3 startups, positioning itself as one of the largest ecosystems globally. This represents a significant increase from 3% in 2018 to 12% of the world’s Web3 developers in 2023. To capitalize on this vast potential, the government should introduce targeted skill development programs to enhance blockchain and Web3 skills. Additionally, regulatory sandboxes can be established nationwide to encourage Web3 startups, thereby fostering innovation. 
  • Since the taxation regime for VDAs introduced in the union Budget 2022 has not achieved the intended purpose of enabling VDA transactions to be monitored, rationalize the framework to make India a global hub for Web3 activity. This includes Decreasing the TDS rate on the transfer of Virtual Digital Assets (VDAs) to 0.01% from the current 1%, Allowing offsetting of losses as well as Reassess the flat rate of 30% applied to income from the transfer of Virtual Digital Assets (VDAs). 
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