India’s 2024 Election Unlikely To Change Cryptocurrency Laws

Industry Observers suggest that Indian election 2024 would unlikely change restrictive cryptocurrency policies in the country despite a growing digital asset ecosystem.

TakeAway Points:

  • The conservative crypto policies in place in India are unlikely to alter when Modi wins the general election in 2024 and keeps them in place.
  • The fact that no significant political party has made cryptocurrency a priority in their manifestos suggests that things will stay the same for India’s ecosystem of digital assets.
  • There is a possibility of policy modification in relation to the growth of the eRupee and the global G20 framework, but major changes are not anticipated until at least late in 2024.

Election-related Effects on Cryptocurrency Policy

The dynamic and demanding cryptocurrency ecosystem will be the backdrop for India’s general election in 2024. Industry observers have reached an agreement to CoinDesk, despite the excitement surrounding the multi-phased elections: the result is unlikely to change the current stringent crypto laws.

Prime Minister Narendra Modi leads with a sizable lead in pre-election surveys. Crypto policy is still, at most, a side issue for the opposition, which is uniting under the name of the Indian National Developmental Inclusive Alliance (I.N.D.I.A.) in opposition to Modi’s Bharatiya Janta Party (BJP).

Current Situation with Cryptos

India has imposed strict tax laws on cryptocurrency transactions under Modi’s direction, including a 30% profit tax without the option to recover losses and a 1% tax that is withheld at source. The exchange registration requirements for anti-money laundering compliance, when combined with these policies, have severely hindered the growth of the digital asset ecosystem.

The recent boom and the prohibition on offshore exchanges have provided a brief reprieve, notwithstanding these difficulties. Nonetheless, the general attitude is still cautious, as noted by Mohit Chawdhry of the Esya Centre Think Tank, who called attention to the administration’s “patchwork of regulations” and “lukewarm approach.”

Cryptocurrencies and Political Parties

The electoral manifestos of the two main political parties, the BJP and the INC, do not specifically address cryptocurrencies, blockchain, or Web3. While there is a general trend of euphemism references to digital assets, this omission does not necessarily indicate disinterest.

While the INC suggests digital ledgers for farmers, the BJP’s manifesto makes vague references to improving cybersecurity and digital public infrastructure. Even if they are brief, these references imply an understanding of the significance of digital technologies. Nonetheless, the discussion on cryptocurrencies is still overshadowed by more general socio-political concerns.

India’s Crypto Policy in the Future

Analysts and industry insiders generally believe that the status quo will persist after the election. With little immediate emphasis on cryptocurrencies, Modi’s predicted victory is likely to maintain current policies. On the other hand, even a remote victory for the opposition coalition would still push crypto policy on the back burner in favour of other urgent issues. 

Depending on how the administration handles its post-election transition, the end of 2024 seems to be the most optimistic date for any policy changes. Recent remarks by Finance Minister Nirmala Sitharaman and India’s initiative in creating a G20 framework for crypto policies point to a gradual, although cautious, approach to digital assets.

“Indian elections are still focussed mainly around socio-political issues… Technology has started becoming an agenda item but is more from the setting up [of a] manufacturing base in India and the job-creation lens.” Kiran Vivekananda, CoinDCX.

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