More regulation of the Cryptocurrency and Blockchain space is coming. In fact, 2023 may see it coming in hard as governments front run the pilots of Central Bank Digital Currencies. With India and Nigeria doing just that, and with the country taking on the G20 presidency in December, there seems to be rapid “progress” towards such global regulations on Cryptocurrencies and Digital assets.
On one hand, it might potentially it could prove to be an opportunity for the community to help shape more progressive policies that make India a global leader (and more competitive). However, many fear that the government is not really listening to the industry.
India’s Path Towards Crypto Regulation
India took its first step towards crypto regulation during the Budget Session in February 2022. They started with the announcement of the introduction of taxes on virtual digital assets (VDAs). However, the crypto industry heavily criticized the legislation and declared it a ‘crippling tax regime’. Meanwhile, the country’s central bank previously called for a ban on cryptocurrencies – will now have a prominent role in framing global crypto regulation.
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It really does sound negative coming out of the Central Bank or Department of Economic Affairs. However, we are still a long way off from seeing that regulation, and more importantly its actual implementation. Of more immediate concern for Indian crypto, lovers are the dark clouds of the current bear market and not speculation on possible future regulation.
Though it might seem reasonable to conclude that currently there is a lot of doom and gloom for the Indian crypto grassroots, the truth is a very different place. There you find people doing what all smart people do in a bear market and that’s BUILD! And nothing more clearly embodies the positive outlook and vibrancy of the space than the recently concluded Indian Blockchain Week.
Held between November 29 and December 7, the annual Indian Blockchain Week, was a series of events aimed at fostering young South Asian talent. Around 1000 delegates from the blockchain industry, government, and academia came together in Bangalore to participate in hackathons, workshops, conferences, and community events. Top highlights included the ETHIndia hackathon and Polygon x Buidl.so Demo Day. The ETHIndia hackathon provided an opportunity for individuals from different backgrounds to come together and create something positive through collaboration and learning. Meanwhile, the Demo Day attendees included some of the top investors in the Indian web3 space.
Nigeria’s Government v. SEC- Crypto Related Regulations
Following SEC’s suspension of cryptocurrency approval in February 2021, the central bank banned crypto trades in a move to neutralise threats to Nigeria’s financial system. This occurred despite young Nigerians accounting for the largest volume of cryptocurrency transactions outside the U.S.
Apparently, Nigeria’s SEC will only consider “sensible digital assets” and not crypto, as it plans to improve trading in digital assets.
Per Bloomberg, the general director; Lamido Yugda said, “We are looking at digital assets that really protect investors.”
According to the Chainalysis Crypto Adoption Index 2021, Nigeria ranked sixth in global crypto adoption out of 154 countries. Although, the country didn’t make the top-10 in the 2023 rankings, data by Merchant Machine have shown that Nigeria will lead global Crypto adoption by 2030: “Nigeria is at the top of the list, with an estimated 100% by 2030. This means that if crypto use continues to grow at its current rate, the entire population of Nigeria will be using cryptocurrencies! The popularity of cryptocurrency could be explained by the country’s poor economy making alternative currencies appealing. The devaluation of Nigeria’s currency, the naira, will likely continue to drive more and more Nigerian natives to invest in cryptocurrency instead.”
In wanting a better conclusion, it’s just worth remembering that governments will regulate but its people that build. And crypto has the advantage that some of the most forward-thinking innovative minds are here working for a better future.