The good news for crypto is that it was finally acknowledged in the budget. That doesn’t mean it’s legal—it will only be after the crypto bill. Until then, regulated entities in India can’t offer trading in crypto. Here’s my reading of crypto post the budget.

The 30% tax without the option to set-off of losses against other tokens or deductions can lead to a drop in turnover. Market markers & active traders are usually 80%+ of turnover in most trading businesses. If costs can’t be shown as an expense, losses can compound quickly.

Clearly, crypto, at best, will be treated as an asset and not a currency. If it’s not a currency, it loses its primary use case. Whenever the crypto bill comes through, my guess is that they will want to ring-fence Indian crypto to restrict capital flows outside India.

So, crypto will potentially be treated like stocks. They will probably have to be held in some demat equivalent overseen by a regulated entity. If this happens, crypto will be centralized and lose its next big “advantage.”

So yeah, if crypto prices don’t keep going up like the last 2 years, I don’t see how the current adoption rates will hold up, assuming that some of what I said comes to pass. Having said that, we’ll be ready to offer crypto whenever SEBI gives its blessing.

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