India Dithering about whether to embrace digital assets causing thousands of developers, investors and entrepreneurs to go to places with more friendly regulations, according to the founders of the most famous Crypto startup in the country.
“Drain the brain is really crazy,” Sandeep Nailwal, the Polygon operates the Layer 2 protocol called the biggest blockchain ethereum system, said in an interview from Dubai.
India, with an estimated 15 million active Crypto users, has been trapped in regulatory limbo since the Supreme Court in 2020 canceled the central bank’s prohibition on digital tokens. This year’s government launched a tax on Crypto transactions without formally stating that it would not prohibit trade, a step that became a symbol of confusion.
On Tuesday, Minister of Finance Nirmala Sitharaman said the government had not made a last call on whether it would forbid virtual coins or regulate it. At the same time, he acknowledged the industry’s potential as a source of tax income: “Many Indians have seen the future in it, therefore I see the possibility of income in it,” he said. The government imposes 30% tax on digital coin transactions.
NaiLwal, who was jointly founded by Polygon in 2017, moved to Dubai two years ago. Emirates aspire to become a Crypto hub for the Middle East – just as for traditional financial services – and on Wednesday, he adopted the law to regulate digital assets.
Power house?
The eponymous polygon protocol is used by developers to make Ethhereum transactions cheaper and faster. It has around 7,000 descretalization applications (or DAPPs), more than 130 million unique users, and handles more than 3 million daily transactions. In February, Polygon raised $ 450 million by selling Matic tokens to investors led by Indian Sequoia Capital.
“I want to live in India and promote web3 ecosystems,” said the 34-year-old player. “But overall, the way the regulatory uncertainty exists and how big the polygon does not make sense for us or for any team to expose their protocol to local risk.”
In advance, India has the potential to be the center of Crypto. The population of 1.4 billion people tilted young, with middle class growing and highly educated. That, combined with a traditional financial system that is less developed, has caused the second highest level of Crypto’s adoption in the world behind Vietnam, according to the chain of the Blockchain research company. Overall, Crypto transactions jumped 641% between July 2020 and June 2021, Chainalysis said in the October report.
China, the only country with a larger population, last year stated all illegal Cryptocurrency transactions.
The government around the world has long been wrestling with the need to tame the worst excess of an industry that is struck by speculation, fraud and hacking incidents, while at the same time utilizing the growth and potential of exploding innovation. Countries from Singapore to M.S. Now moving towards a more structured approach to regulate this sector.
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