Bharat Web3 Association Acknowledges India's Growing Interest in DeFi Amid G20 Presidency Note on Crypto

DeFi Experiments Present Nearly Tax-Free and Cost-Effective Alternatives to Conventional Centralized Banking Services for Indian Users.

India Emerges as Thriving Startup Hub for Web3 Projects, Noted by Bharat Web3 Association

The Bharat Web3 Association (BWA) has highlighted India’s growing prominence as a lucrative startup hub for Web3 projects, attributing it to the country’s abundant pool of skilled developers. Established in November of the previous year, BWA, India’s own crypto advocacy group, aims to foster better communication between industry players and the government. In its recent observations, BWA noticed a significant rise in DeFi (Decentralized Finance) experiments among Indians due to its potential to offer nearly tax-free and cost-effective alternatives to traditional centralized banking services.

DeFi allows financial products to operate on public blockchain networks, free from central bank or intermediary regulation. Individuals seeking alternatives to traditional banking can explore DeFi protocols for investing their money.

Indians are particularly drawn to the DeFi sector as it continues to expand with a wide array of applications, including loans and exchanges. According to Finder.com, India leads in the value of DeFi transactions for both individuals and retailers. One contributing factor to this trend is the substantial volume of remittances sent back to India from its overseas citizens, which can be processed faster and more affordably through cryptocurrencies.

Dilip Chenoy, Chairman of BWA, stated, “India is one of the fastest global adopters of DeFi, a trend that can enhance financial inclusion by granting expanded access to credit for the MSME sector and individuals unable to access credit from banks. The quality of startups being founded in India is top-notch.”

Chenoy believes that once India establishes its crypto laws framework, there will be a surge of Web3 initiatives from the country. Currently, as the President of the G20 nations, India is actively working on a set of crypto regulations with global implications.

On August 1, the country released a presidency note on crypto, providing an update on the progress of crypto laws. The International Monetary Fund (IMF) and the Financial Stability Board (FSB) are expected to jointly present a synthesis paper on their crypto regulation suggestions, focusing on macro-financial implications and potential risks to emerging markets and developing economies. The paper will also aim to raise awareness about cryptocurrencies, making users aware of the benefits and drawbacks of engaging with digital assets.

India has submitted its ideas, suggestions, and concerns around crypto to the G20 group during its presidency. The nature of virtual digital assets (VDAs) being cross-jurisdictional has led to a need for coordinated regulatory mechanisms instead of individual countries adopting varying stances. Although India does not have explicit regulations for Web3, certain provisions have brought the sector under oversight, including income tax frameworks, CERT-IN guidelines, ASCI guidelines, and their inclusion in the Prevention of Money Laundering Act (PMLA) as reporting entities.

BWA’s leadership during India’s G20 presidency aims to contribute to the formulation of detailed and appropriate global crypto regulations. Furthermore, Web3 elements like asset tokenization and the eRupee CBDC are expected to make Indians more comfortable with exploring various Web3 sectors, such as real estate, art, supply chain, and gaming.

Recently, the Telangana government in India introduced its Asset Tokenization Standard Framework, offering a unified set of rules and guidelines for asset tokenization.

Overall, BWA’s analysis of India’s response to making the VDA sector safer underscores the potential for the G20 nations to establish well-defined and effective crypto regulations under India’s leadership. India’s G20 presidency will conclude in December of the current year, coinciding with the expected release of the first draft of global crypto rules.