Despite being in the pipeline for more than two years, India has not been able to come up with legislation for cryptocurrency so far. The Centre has levied a 30 percent tax on all income/profit made from cryptocurrency in addition to the 1 percent TDS on all crypto transactions. All this when more than 10 million Indians have made investments in cryptocurrencies.
This lack of clarity on policies concerning cryptocurrencies and blockchain technology is not only expected to reduce crypto investments but is also likely to trigger an exodus of Web 3.0 developers from the country.
This "brain drain" is especially concerning as Web 3.0 -- being hailed as the next internet revolution -- could play a crucial role in strengthening India's economy. Underscoring this, a report from the US India Strategic Partnership Forum and Cross Tower stated that Web 3.0 and digital assets could add $1.1 trillion to India’s GDP over the next decade.
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While India has not been able to gain the early advantage in the field of Web 3.0, several countries around the world have actually framed (or tweaked) policies to make themselves conducive for the growth of Web 3.0 start-ups. Consequently, these nations host a large number of Web 3.0 talents from other nations, including India.
Here's a rundown of nations/jurisdictions attracting Indian Web 3.0 talent:
Dubai: An already favoured destination for cryptocurrency and Web 3.0 companies in the region, Dubai adopted a law to regulate the operations of cryptocurrencies and digital assets like non-fungible tokens (NFTs) earlier this month. In December, it was announced that the Dubai World Trade Centre would be made a crypto zone from where all companies operating cryptocurrencies and virtual assets can operate. In fact, a crypto-based relief fund in India was routed through entities in Dubai last year since regulations in the UAE were found to be "more favourable".
Singapore: The country -- with no capital gains tax -- has always been an investment heaven. In Singapore, the law sees crypto assets of an individual (not a business) as an intangible property attracting no tax. Given Singapore's already-supportive policies for independent businesses, the crypto law only adds a feather to its cap and attracts more Web 3.0 talent.
United States: The country has been facilitating the monetisation of cryptocurrencies. In the US, it is easy to run into an ATM that deals with cryptocurrency or get a crypto credit card. Additionally, several financial organisations, including JP Morgan, are embracing blockchain technology. As a consequence, the US has a thriving ecosystem of blockchain startup companies.
Cayman Islands: The Cayman Islands has emerged as one of the most popular jurisdictions in the world for blockchain-related businesses and cryptocurrency funds as it does not impose any restrictions or licensing requirements targeting the ownership, holding or trading of digital assets.
Malaysia: Just last week, Malaysia's communications ministry expressed its wish to make cryptocurrency a legal tender. While the proposal was ruled out later, the fact remains that the country continues to witness growth in its blockchain startup ecosystem and crypto investments. The country regulated cryptocurrency in 2019 itself. It has now become a prolific ground for Web 3 developers.
Malta: Known as the “Blockchain Island”, Malta has a set framework for companies and startups that work with blockchain. Despite local banks not being onboard with the idea, the Maltese government supports cryptocurrencies. Recently, Robert Abela, Malta's Prime Minister, called cryptocurrency “the inevitable future of money”.
What's Web 3.0?
The development of the World Wide Web has been divided into phases -- Web 1 (non-interactive web during the late 1990s and early 2000s); Web 2 (emergence of YouTube, Facebook, and other social media behemoths); Web 3 (decentralisation, greater adoption of blockchain technology).
When the internet was launched, we could just read and publish content online. This phase is now looked at as Web 1. Meanwhile, the era of social media sites has been termed Web 2. This was the period when users could not just read and write but also share and interact through social media platforms.
In Web 3, users will read, write, interact, share, and even own a stake in the blockchain networks that run an internet service. The basic Web 3 premise being -- the decisions concerning online platforms like seizing usernames, and banning accounts, among others would not be taken unilaterally by tech giants (like Google and Facebook) but collectively by all those who have a stake in that particular platform.
