Government aims to educate Indians on risks around crypto
The initiative could go live in upcoming months
India had over 115 million crypto investors as of August 2022
Photo Credit: Pixabay/ Darshak Pandya
The Indian government, that is still quite sceptical about letting citizens dabble in the crypto sector, is reportedly planning to raise awareness around the volatile industry. The government-run Investor Protection and Education Fund Authority is set to bring this crypto educational campaign to make sure that people clearly know about the risks they could be exposing their finances to, by experimenting with crypto assets. The step comes in the backdrop of the crypto industry currently going through a severe crypto winter with several companies having collapsed under market pressure.
“The campaign will highlight that cryptocurrencies are not legal in India and there are also deep risks involved in such assets. Any investment where the people are being promised lucrative and assured returns, there is an element of high risk,” media reports quoted officials familiar with the matter as saying.
Indian investors have been stepping into the crypto rink despite the financial risks that are associated with the assets. Back-to-back scams and hack attacks hitting crypto exchanges along with daily fluctuations in asset prices can cost investors boatloads of their savings.
As per a KuCoin report, India had over 115 million crypto investors, making for 15 percent of its massive population as of August 2022.
In September 2022, India surpassed the US and Russia on the 2022 Global Crypto Adoption Index that was compiled by blockchain research firm Chainalysis. India had secured the fourth rank on the Index that had listed the 20 nations where crypto adoption showed most growth.
The booming curiosity in the virtual digital assets industry has nudged the Indian government to take pro-active steps in safeguarding the interest of investors.
The finance ministry of India is currently working on formulating laws to govern the crypto industry. India did begin to tax crypto profits by 30 percent last year. To keep a track of otherwise largely anonymous crypto transactions, the Indian government has also imposed a one percent TDS on each transaction.
Under its ongoing G20 Presidency, India has called for an international collaboration to frame such crypto rules, that are applicable on a global level.
As per the International Monetary Fund (IMF), the return correlations of Bitcoin and the Indian stock market increased ten-fold in the post-pandemic world. This is indicative of the limited risk diversification benefits of cryptocurrencies.
For now, it remains unclear by when would India's crypto awareness programme go live on the national scale.
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