The effects of Web 3.0 are apparent on our society with concepts such as Blockchain, Cryptocurrency, Smart Contracts, Non-Fungible Tokens (NFT) and Digital Assets in the Metaverse becoming household names. These concepts have seeped into every corner of our civilization, leading to various public and legal discourses, creating more notional distinctions about these concepts. One such discourse that has created a rather odd demarcation in our market is that between cryptocurrency and bitcoin, which can often be confusing even to readers familiar with the crypto paradigm. The acceptance of Bitcoin over other cryptocurrencies as legal tender by the Central African Republic has created a ripple effect attracting several unconventional investors and has reinforced the distinction between Bitcoin and other cryptocurrencies.
Indian government stance on cryptocurrency
The Indian government had taken a neutral stance on the issue, which favored discerning investors in the Indian market as they reaped the benefits of this space, especially those who had invested in Bitcoin in its early stage. People viewed cryptocurrencies as a way to make quick money rather than approaching it like the stock market. Thus, there has never been a real debate about the value of Cryptocurrency versus Bitcoin in India.
However, the Indian government, after observing the volatile trends in this market, had multiple deliberations and decided to impose a 30% tax on any transaction involving the cryptocurrency. This initiative by the government has created mass awareness on the Crypto domain in the Indian market, sparking several conversations and debates, one of them being the stability of Bitcoin compared to other cryptocurrencies, where a unambiguous opinion supporting bitcoin arose and the other being the legality of these currencies. As a precursor to a robust regulatory regime, India’s first digital rupee project known as Central Bank Digital Currency (CBDC) (e₹) has already been launched by the Reserve Bank India.
The future of cryptocurrency
With Bitcoin’s recent crash, the future looks bleak as notions of stability around the currency have lost traction around the world. This was further amplified by the doubts created due to inflation badly affecting the volume of cryptocurrency trading as a whole, thus leveling the playing field between Bitcoin and other coins like Ethereum, Solana and others. On the other hand, Blockchain technologies have already started impacting businesses outside of finance and have penetrated the healthcare, legal, cybersecurity, insurance and various other industries where they are used as ledger to streamline transactions.
However, the focus of Web 3.0 has shifted from the currencies mentioned above to NFTs and virtual digital assets that are sold for compensation on Metaverse, which promises to be the future and is already attracting the attention of governments around the world. , including India which decided to impose a 30% tax on other digital assets as well. This seems like token regulation and with such rapid developments in this space, there is a real need to address the regulatory space regarding Web 3.0 for clarity and investor protection.
The opinions expressed above are those of the author.
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