Union Budget 2021-22 Expectations for Startups: When it comes to the term ‘cryptocurrency’, it gets challenging for most individuals to fully grasp since of its technical elements and use. Thus, in layman’s language, the word ‘cryptocurrency’ can be defined as digital income or virtual currency utilised by individuals to make transactions with no the involvement of any third party, that is, banks. The transactions produced via cryptocurrencies are completely encrypted and secured. This tends to make them one of the safest investing choices. Most of the cryptocurrencies use blockchain technologies which provides them complete protection from stealing confidential details or counterfeiting by storing transactional details in hugely coded blocks. Ether and Bitcoin are the most common examples of cryptocurrencies.
Was Union Budget 2020 useful?
With the advent of speedy digitalisation, more and more individuals want to invest in cryptocurrencies due to their development possible and safety of transactions. But the query which can’t be overlooked right here is that how concerned is the government relating to the development and use of cryptocurrencies? In Union Budget 2020, Union Finance Minister Nirmala Sitharaman talked about numerous useful tax reforms brought up by the government for the dwindling MSME and startup sectors but did not speak about any reform for the cryptocurrency startup business. This was particularly when some reforms and measures had been badly essential. Thus, Union Budget 2020 did not prove to be constructive for the cryptocurrency startup business.
Ray of Hope
On April 6, 2018, the Reserve Bank of India (RBI) imposed a ban on the holding and trading of cryptocurrencies in India. This was since of the outlook that cryptocurrencies could effect the working of the banking program and be utilised in advertising income laundering and terrorism due to the anonymity of transactions. But, on March 4, 2020, the Supreme Court rescinded the ban imposed by the RBI. This came as a relief for cryptocurrency startups.
With the upliftment of the ban imposed by the central bank of India, lots of cryptocurrency startups witnessed several folds of development in their customers. Numerous crypto startups could raise millions of dollars via the investments produced by each Indian and foreign investment firms. International crypto players began investing in the Indian market place via mergers and acquisitions. This helped the cryptocurrency sector to acquire momentum when fighting against the deadly pandemic.
Also study: Budget 2021 Expectations: MSMEs, startups seek improved debt access, GST relaxation, more from FM Sitharaman
Challenges
For an business that runs on higher-finish technologies, it is standard to be surrounded by speculations. For individuals, exactly where investing in a tangible asset has been the age-old idea, placing income in virtual assets can be a matter of hesitation. Also, the ban and early criticism did lead to harm to the credibility of the sector. Like any new idea, even the cryptocurrency sector wants to be offered time and help to be capable to garner trust and produce awareness.
Expectations
The upliftment of the ban has come as a saviour for cryptocurrency startups, and for additional development, the expectations of such startups are higher from the Union Budget 2021. The cryptocurrency business has the absence of a clear regulatory framework, and that is the greatest hurdle that is coming in its path of all round good results. Startups want correct legislation relating to investment in cryptocurrencies from the government.
Presently, there are no particular laws for investment in cryptocurrencies which prevents lots of individuals from investing in them. A correct legal framework relating to cryptocurrencies will safeguard the interests of purchasers and sellers. After the implementation of important laws, it will be a lot easier to track the transactions, as a result, major to enhanced security of transactions. If the government does not come up with such regulations, not only the cryptocurrency business will endure, but the nation will lag behind the rest of the planet in technological development.
The second expectation of cryptocurrency business entrepreneurs is funding. The pandemic has led to the bankruptcy of lots of startups, of which lots of halted their operations either temporarily or permanently. Thus, entrepreneurs from the cryptocurrency business are expecting one thing like grants, loans at low-interest prices, and seed funding from Union Budget 2021 that will assist their startups in the early stages and revival. The above-offered details leads to the conclusion that for the bloom of cryptocurrency startups, the government wants to bring some laws and help the startups with funds in the early stages of their business enterprise cycles. If not, then the nation would miss some critical possibilities and the bigger aim of digital India would not be accomplished absolutely.
Kumar Gaurav is the Founder and CEO of Cashaa. Views expressed are the author’s personal.