India has blew the clarion call of encryption supervision, and the taxation of digital currency will sever the decentralization of the blockchain
According to new cryptocurrency rules introduced by the Indian government last week, companies engaged in cryptocurrency trading are required to disclose information such as their cryptocurrency holdings in their financial statements from April 1, which applies to all Indian companies.
India’s clarion call on encryption regulation is not unrelated to the social and financial problems faced by India itself. From another perspective, India’s move may lead other countries with similar national conditions to follow suit and further reduce the space for digital asset transactions. Through the analysis of the logic and process of Indian cryptocurrency taxation, it is basically possible to make a macro forecast of the future of global digital asset transactions!
Taxation logic in India.
India’s implementation of the 2020 epidemic prevention policy is not satisfactory. India’s unique social structure and social operation mode make it impossible to talk about India’s epidemic prevention policy. Large slums in larger cities have also been hit hard by the epidemic. Handicraftsmen and people living in extreme poverty in the slums have lost their jobs amid shrinking global trade, which has exacerbated India’s economic winter.
From March to May 2020, India has carried out a relatively strict lockdown operation, forcing low-income families in the city to choose to go out of the city in order to survive, which makes India’s epidemic prevention measures useless. In February 2021, India’s second wave of epidemics first broke out in Maharashtra, the economic center of India. By the beginning of March, this data had grown to 8,000–10,000 people. On March 19, this data has grown to 25,000 people, and on March 24, this data has further grown to 31,885 people. On March 25, the number of new infections in Mabang reached 35,952, the largest number in a single day since the outbreak began.
In addition, recent political gatherings in India have also promoted the rapid spread of the epidemic. The farmers’ protests that have been held since November last year have not only been held in New Delhi, the capital of India, but also in cities such as Mumbai and Bangalore. In March, employees of the Indian state-owned banking industry held a two-day large-scale rally to protest. These rallies and group struggles are simply unable to maintain social distancing.
Internationally, India’s foreign exchange has been diluted by the United States’ quantitative easing policy. As of March 5, India’s foreign exchange reserves stood at 580.3 billion U.S. dollars, of which more than 70% of foreign exchange is in U.S. dollar debt. From 2020 to 2021, a total of 4 trillion U.S. dollars in “bail-out” policy has caused the U.S. dollar to generally depreciate, and India’s foreign exchange has shrunk by at least 20%.
India’s burnout may be precisely its original motivation for taxing digital assets. This is why relevant Indians have been emphasizing that no matter any business, taxation includes income from any source. The revenue generated by cryptocurrency should provide services under taxation.
Pros and cons of digital asset taxation
The taxation of digital assets can be viewed from both positive and negative aspects. The positive is that digital assets can be taxed openly and can enter the markets of various countries to circulate in the form of commodities. This is obviously good news for the digital assets themselves and the service entities behind the digital assets. The normal tax payment of blockchain companies can not only make their status equal to that of traditional industries, but also protect their rights and interests by law. The security of digital assets no longer depends on technical barriers and personal professionalism.