News Update; India Legalizing Crypto? – Crypto Business Show Episode 5
Rob: Welcome to the crypto business podcast brought to you by TokenMinds. I’m your host Rob Eijgenraam, director at TokenMinds, a full-service crypto agency that provides marketing development and strategy service for blockchain and nft projects in this podcast we will discuss any blockchain company that is relevant for businesses and entrepreneurs. Today we’ll go over the relevant news articles. For this week I have a podcast with me Dev and Reinhart. Dev is a business development manager working in the blockchain field for several years now and Reinhart is a data analyst working full-time on gathering and analyzing data in the crypto industry let’s start first with our main news article for this week which is India’s updated crypto stance, Dev can you tell us a little bit more about that.
Dev: Sure thank you very much for the introduction Rob, I appreciate that. So the theme this week has been to cover some of the key international announcements right several countries coming out and announcing their adoption of cbdc’s and you know for me India rings a loud bell in the economic times you know India recently introduced their budget for the year 2022 and they announced that they’re gonna legalize obviously the use of cryptocurrency assets but you know with the heavy or the maximum tax bracket of 30 percent right so anytime there’s a transfer of virtual cryptocurrency assets they’ll be taxed at 30 percent and there are no deductions allowed at the time of declaring or taxes at the end of the year. So this goes into effect next year April 2023, and while this is obviously a deterrent for a lot of people because of the maximum tax bracket I think it’s been perceived or received by the general public in a favorable way because what it does is it diminishes any or any previously existing ambiguity around the country’s stance of cryptocurrency right and with the cbdc now and I think that will complement the existing payment systems India has a strong payment systems digital payment systems that as it makes paying for the smallest of transactions at a grocery store or larger transactions very easy so with now the cbdc on the blockchain I suspect or anticipate that locally they will now allow for borrowing and lending on a larger scale so more defi apps that could be coming out of this place and more interesting use cases in the dapp development sector that one could see coming out from India yeah that was my first thought that I think.
Rob: Sorry how does this crypto tax work then? This 30 percent is every time you make a transaction how do they calculate it?
Dev: Right, so basically what they’re saying is that it’ll be like you know a capital gains tax for example it’s they’ve now considered at the same bracket so at the end of the year at the end of the fiscal year when you declare your gains and income when you file taxes this particular segment will be taxed at 30 percent, right so that’s the impact that it has with regards to taxation at least right, and there are other couples of impacts as well there’s one on regulation and obviously legal consequences that come off of this right so jurisdiction, the legal system will have to also adapt to this to this new ruling and so from that standpoint there’s more positive sort of resonance in the general public here or at least in the news media that we read of clarity now.
Rob: As well that he also responds quite positively right he was saying finally some serious regulation but too bad about the tax but in general yeah.
Rob: And it’s also coming from a pretty high upright it’s a pretty kind of it’s pretty sure that this is gonna happen.
Dev: Great it’s an annual budget right, so anytime there’s a fiscal budget released every year that’s official dictum essentially right it gives clarity on what’s happening in regards to investments it gives clarity on what those sectors of investments will be how fdi which is foreign direct investment will play a key role how foreign manufacturers can come to establish their businesses here and among other things where the nation’s priorities lie with regards to infrastructure which is roads constructions you name it education right so now it’s interesting to see that with India this place a very important has an important impact because India has not yet established itself as a key economic player it is growing at a rapid pace it’s got a strong economy projected to grow at a rapid pace but it’s not the us it’s not France it’s not the U.K. right where cbdc would have a positive impact in India it may have or maybe received it negatively in the us and in the west where liberty takes a greater precedence not ease of government control right so that sort of ties me into the next article that I wanted to share with you which is an op-ed piece on Newsweek where the editor and the authors are frowning upon the U.S is you know welcoming or piloting a cbdc program right it’s kind of follows the same path as in the footwork of china for the steps of china where they’re already piloting their cbdc with millions of people already transacting daily consumers, and what not in the U.S. obviously yes they they’ll have again a better transparency on what’s happening with their currency and what kind of transactions are taking place but there’s a huge concern about sovereignty and liberty, and the implications that they have on unknowing, and maintaining the data right so another key thing to look at is the fact that this is all on the blockchain so the data of every individual consumer now is going to be on that blockchain which will which the central government would have access to which is not the case right now so people are up in arms about that aspect of the cbdc at least in the U.S. what are your thoughts there Rob?
Rob: Yeah I think the privacy issue does make a lot of sense but at the same time there is I don’t know which technology they will base it on but I do know that, for example, Ethereum is working on implementations to allow for more privacy and transactions and for sure there are other blockchains as well that already have this feature so I think it doesn’t necessarily need to mean that all the transactions are visible for everyone but I’m not sure yeah what technology they will use for this.
Dev: Right and speaking about new technology my last and final article to complement our talks on cbdc’s is the one by theblockcrypto.com here we have seller which is an open source software blockchain that launched a stable coin which was pegged on the brazilian rial right, and it’s been already introduced and again this is now it reminds me of what India has done with their introduction of their plans for cbdc here it’s a stable coin on a peg to the real but again the use cases will be similar at field where the BRIC countries now which are gaining a moment in economic growth are trying to you know again be the incumbent nations when it comes to use cases for d5 applications so for businesses looking to leverage blockchain you can you can definitely see a lot of use cases coming out of brazil and Latin America wanting to leverage the blockchain and cryptocurrency and now this stablecoin which they think would remain stable obviously depends on how the rial does going forward we will see use cases coming out with regards to again financial lending borrowing banking on a larger scale.
Rob: Yeah definitely interesting.
Dev: And your thoughts here yeah.
Rob: Yeah I know from my perspective I think yeah it’s definitely interesting I think there are quite some projects with kind of stablecoin features terra blockchain is one of them it’s a Korean one that has actually you know not just like the Korean local currency but they support a lot of different ones and it’s good that you mention it in combination with like the cbdc’s because it’s kind of competition for them right so you have these kinds of central bank based ones versus kind of privately operated ones and the second one is definitely most popular right now, especially for USD so there’s a lot of people also talking okay why do you even need a cbdc because we have already very well working stablecoins as is yeah those are my faults about that. What about you Reinhart?
Reinhart: Okay yeah. So I heard about it like Dev have said multiple times about the India with emerging market right and yeah it’s kind of related to me because I found an article about the also coming from an emerging nation emerging market nation like this time I gotta brought an article from mkrypto.com so here’s we can see like Indonesia trading regulators approve strategy like it has been like a month after the rejection from OGK like the finance institution in Indonesia they reject that cryptocurrency should be banned in Indonesia but last week we found that the koftra, the commodity futures trading supervisory agency in Indonesia has issued a permit to trade digital cryptocurrencies so it is legal now which affect almost like 7 million people in Indonesia and it is hardly emerging like Dev said before it is yeah it has some similarities with India because it is an emerging market here and I think it is a big prospect for the future i guess, and yeah that’s it from the creep ember crypto, so yeah what you guys think about the emerging market here in Indonesia so it is now legal to trade and invest in cryptocurrency here.
Rob: Is it similar to what you’re just discussing in India Dev or are there any differences between those two cases?
Dev: I have a feeling this is very similar obviously with it now recognized at a national level people definitely from a consumer standpoint gain confidence in what lies forward and how they may leverage this technology where earlier it may have been you know open to scams and threats and whatnot and just ultra-high risk was considered as ultra-high risk assets here at least with some regulation there is some confidence that people may receive even though they may be higher taxation for example in India’s case or in Indonesia where it will definitely improve the payments and transacting at an international stage right.
Rob: Right. All right and Reinhart I think you found something well not jurisdiction related but it’s more related to companies in the private sector adopting blockchain can you tell us a bit more about that?
Reinhart: Right so yeah I have another article about the big company big tech companies
here it’s about the Google, Google company so yeah from last week we heard that Google is currently launching their teams on digital assets like they are making new division to working specifically on digital assets because it is currently emerging and the reforms of the cryptocurrency also inspired them and you know just now just like almost yeah like a week ago here’s the newest news from cryptopotato.com like Google officially launched a digital assets team like yeah from before we just heard that Google we are working on the new division, we are working on new division but now it is officially launches and it is currently under reach with man lady so yeah he is a well-known technology lawyer there and we can see here like they want to like approach a little bit broader so they hope to use blockchain to offer services for building, transacting and storing value and also launching products in the cloud not only just like the file coin and saya at the forefront so yeah they want to make it like in a bigger or broader approach there to make a new I mean like new solution like new solution and technology and yeah. Yeah, I think that I almost feel like they are officially available.
Rob: I feel like they almost came full circle there with that because I remember in 2016 everybody was asked why is Google not doing anything in crypto, and the running the written joke was a little bit like they’re doing this authenticator app right so at least they’re doing something but obviously that’s not really crypto related so now finally after they notice okay Amazon is doing things on crypto, Facebook obviously with nfts they’re finally coming late to the party this I they’re probably the last big kind of tech firm that is jumping in what do you think about this Dev?
Dev: Would be interesting for me to see because obviously, you know Google’s been very shy since their failures in you know tech-related or when it came to the Google glasses and then with social media but now they’ve in a week after week they’ve made public announcements about their rate of progress and what all they have in the pipeline but it’s I’m curious to know what blockchain they’re using if it’s hedera hashgraph then it’ll be interesting to see if how privately governed it is because if you know on the one hand they’re obviously propagating the use of blockchain but on the other hand it’s going to be governed by elite tech companies and again the feast of purpose but again it’ll be interesting to see how and what kind of products they build what kind of blockchain they use who governs the use of this blockchain these are some of the questions that people will benefit from asking at least so early on at this stage.
Rob: Yeah let’s keep an eye on how this develops. Another thing i think we should all keep an eye on including our audience is DAOs has been a little bit part of the story also in 2021 with of course the constitution dao just if someone doesn’t know what that was about is a dao basically being set up in a matter of a couple of weeks through like twitter communication and discord to actually make a bid on one of the copies of the constitution in the end they got around 20 million dollar raised through Ethereum but then you know their bid was obviously didn’t work out but it’s something that is proven in terms of like how fast you can get people together to you know accomplish some kind of a goal through a dao so this week in the news there were a couple of more examples of that one is a Korean museum that is well having some financial issues and they are auctioning their treasures so i have an article from Yahoo finance here having actually two daos being set up that are gonna take part of their auction of some of the national muse of Korea’s treasures so yeah it’s interesting the daos are called national treasure dial and heritage style and they’re formed independently of each other when the media in korea reported that the muse is financially struggling so let’s see how this will world turn out but that’s definitely something that is popping up more and more related to this is an article here from visit insider which is about an existing daos so obviously daos are also tightly related to nfts because some of them actually have a treasury of nfts inside of their dao and the members that are part of the dao they own basically fractional ownership of those nft so this is a particular dao that has a good collection of board ape yacht club nfts which of course have their floor price quite seen increased in the last months and it’s one of the most successful nft projects out there actually so they have a collection of 81 of those and the fractional ownership of their tokens are actually a lot lower in value than the actual assets that they fractionalized so the assets being then the board yacht ape club nft so they had a couple of ideas within the dao because there’s a decision-making process in the dao to submit a proposal what to do and the community can vote on that but some of them were not voted to pass and now there is a vote going about if they should sell those you know those those nfts in order to decrease the value of the underlying assets by about 50 percent apparently and then obviously they will be paid out in dividends to the dao holder so it’s actually almost an opposite dynamic which you see with other dials where the under the fractionalized ownership tokens are a lot higher evaluated than the actual underlining assets and obviously in the last two weeks with some pressure in the market that value will drop as well but in this case it was opposite maybe because it was an nft kind of treasury that was backing it but it’s definitely some interesting development regarding dowsing something definitely to keep a close eye on to see also the possibilities there and how things work out so yeah what do you guys think about this news?
Dev: Right very quickly the whole concept of a dao to begin with decentralized autonomous organization kind of like a community that you know that has voting rights and some sort of a say based on their ownership of assets on that dao or like a shared bank account essentially right where the organization again run on the blockchain gives more power to people who are part of this community and together we’ve seeing very interesting incidents take place in the last six months where dao’s essentially communities have come together in a bid to buy national documents or in this case really save an nft collection in a way help its value so it would be interesting to see you know if the forecast for this year is more daos more people begin to appreciate what a dao really does and it offers and how we already see communities building up on telegram discord and other social media channels how they may then migrate or see the benefits of taking that collective power to a dao and help impact transacting it’ll be really interesting for me to see that but yeah i hope there there’ll be more appreciation of what a dao can really offer and the general public would be interested in in getting more daos built so to speak.
Rob: Absolutely yeah an interesting part about that is it kind of comes all together right like the fractionalized ownership of real life objects inside of nfts and then daos coming together to actually you know do something in terms of buying those and then you have what we just discussed in terms of like cbdc’s or other stable coins being legalized for kind of payment or other defi applications where everything can kind of come together in this new web 3.0 space so yeah a lot of things that we will be able to follow in the next couple of months so thank you, thank you Dev, thank you Reinhart for the updates appreciate it i will talk to you both next week, and thank you listeners for for your attention we will be back next week with another news episode and beginning of next week we will talk about nft development so i will have Josh and Hermand in the show who are both experts on developing nft smart contracts as well as the whole process of testing and deploying them so see you all then and have a nice rest of the week. Bye-bye.