Binance’s APAC Head Calls For Clear Regulatory Framework In India To Attract Crypto Investments

Crypto exchange Binance’s Asia Pacific (APAC) head Leon Foong has said that India needs a clear regulatory framework for investors to step up their investments in cryptocurrency startups in the country.

Foong told Indian Express that he is keen on investing in India, but  “a clear, progressive, and pro-innovation regulatory framework is necessary in giving investors comfort and certainty that India is the right place to be putting their money”.

“The key is to let the ecosystem flourish and not implement restrictive policies that prevent the industry from growing to its full potential,” he added.

The statement comes at a time when the Indian government is reportedly mulling to levy GST at the rate of 28% on cryptocurrencies, at par with lottery, casinos, race course and betting. This is in addition to the 30% tax on earnings from virtual digital assets, including crypto. 

Besides, the government has also imposed 1% TDS (tax deducted at source) on crypto transactions above a certain threshold, while crypto exchanges have also stopped offering the UPI payment method for crypto transactions in the country. 

Speaking on the blockchain ecosystem in India, Foong said, “Blockchain startups are what garnered the attention of Binance and many global tech experts and investors in India… If the right blockchain entrepreneurs can be matched with talent and capital, we will see an acceleration in the number of crypto and Web3.0  projects that are built out of India.”

He said that the multiplier effects from the Web3 industry would flow into the economy and boost the GDP of India once the industry starts generating a large number of jobs and economic benefits.

There is regulatory uncertainty about cryptocurrencies in the country. On Monday, RBI Governor Shaktikanta Das told CNBC-TV18 that cryptocurrencies have no underlying value, and cited the recent Terra-Luna crash. He further added that the central bank had long been cautioning the general public against these virtual digital assets (VDAs).

Earlier, Finance Minister Nirmala Sitharaman said that blockchain could be manipulated and used for money laundering or terror financing activities. She had also called for global crypto regulations to curb the purported misuse.

Amidst all these, Indian crypto startups continue to get investments. According to an Inc42 report, more than 350 blockchain startups were operational in India last year, receiving more than $247 Mn in funding in 2021. Of these, the crypto segment received the biggest chunk of investment.

The country also continues to be a big crypto market. According to a Chainalysis report, India’s crypto market grew 641% between 2020 and 2021, turning India into one of the largest-growing cryptocurrency markets.