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India’s ruling BJP spokesperson Pradeep Bhandari advocates for a Bitcoin reserve pilot, emphasizing the need for regulatory clarity amid the country’s current “taxed but unregulated” crypto landscape.
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Bhandari highlights global trends, including the US’s strategic Bitcoin reserves and Bhutan’s state-led mining, suggesting India’s renewable energy capacity positions it well for a sovereign Bitcoin strategy.
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According to COINOTAG, Bhandari asserts that a measured Bitcoin reserve pilot could enhance economic resilience and foster innovation while ensuring investor protection through clearer regulations.
India’s crypto sector faces regulatory uncertainty despite heavy taxation; BJP’s Pradeep Bhandari calls for a Bitcoin reserve pilot to boost economic resilience and innovation.
India’s Crypto Taxation Without Regulation: A Barrier to Growth
India currently imposes a 30% flat tax on profits from virtual digital assets (VDAs) such as Bitcoin and Ethereum, under Section 115BBH of the Income Tax Act. However, this taxation framework lacks accompanying regulatory oversight, creating a complex environment for investors and businesses alike. While purchase costs can be deducted from taxable income, the absence of provisions for deducting other expenses or accounting for losses limits effective tax planning.
Additionally, a 1% Tax Deducted at Source (TDS) applies to all crypto transactions exceeding approximately $115, further complicating liquidity and transaction flows. This dual approach—heavy taxation without clear regulatory guidelines—has led to uncertainty, potentially stifling innovation and deterring institutional participation in India’s burgeoning crypto market.
Global Crypto Trends Highlight the Need for Strategic Adaptation
Bhandari draws attention to international developments that underscore the strategic importance of integrating crypto assets into national economic frameworks. The United States has initiated budget-neutral purchases to expand its Bitcoin reserves, and several US states have authorized Bitcoin as a reserve asset. Meanwhile, Bhutan’s government-led mining initiatives demonstrate how state involvement can leverage renewable energy resources to support crypto infrastructure.
During India’s 2023 G20 presidency, the government facilitated coordination with the International Monetary Fund to establish a crypto working group. However, Bhandari notes that other G20 nations, including Russia, China, and Brazil, are advancing their crypto strategies independently, signaling a competitive global landscape where India risks falling behind without decisive action.
Proposed Bitcoin Reserve Pilot: A Catalyst for Regulatory Clarity and Innovation
Bhandari advocates for launching a sovereign Bitcoin reserve pilot as a pragmatic first step toward formalizing India’s crypto policy. Such an initiative could provide a controlled environment to test the integration of Bitcoin into the national financial system, offering valuable insights into regulatory impacts, market dynamics, and technological requirements.
Clear regulatory frameworks accompanying the pilot would enhance transparency and investor protection, addressing current concerns about the unregulated nature of crypto assets in India. This approach aligns with global best practices, balancing innovation with risk management.
Leveraging Renewable Energy for Sustainable Crypto Development
India’s expanding renewable energy infrastructure presents a unique opportunity to support sustainable crypto mining and blockchain operations. Bhandari emphasizes that harnessing this green energy potential could position India as a leader in environmentally responsible crypto initiatives, mitigating concerns about the sector’s carbon footprint.
By integrating renewable energy with a sovereign Bitcoin strategy, India could not only foster economic resilience but also contribute to global efforts in sustainable digital asset management.
Conclusion
India’s current crypto taxation without regulation creates a challenging environment for market participants. Pradeep Bhandari’s call for a Bitcoin reserve pilot underscores the need for a strategic, measured approach to digital assets that balances innovation with oversight. Leveraging India’s renewable energy capacity and aligning with global trends could enable the country to establish a robust, transparent crypto ecosystem. Clear regulatory frameworks and pilot initiatives will be essential to unlocking the full potential of crypto assets while safeguarding investor interests and promoting economic resilience.
