The Bharat Web3 Association (BWA), an industry body representing Web3 companies in India, is actively advocating for regulatory clarity on digital asset trading within the country. The BWA has emphasized the urgent need for a globally coordinated policy framework on digital assets in India. With over 80% of G20 members and major financial hubs like the United States, United Kingdom, and Hong Kong embracing cryptocurrencies as legitimate trading instruments, the association believes that India must follow suit to mitigate risks and foster innovation within the burgeoning Web3 ecosystem.

To address this issue, the BWA has proposed two potential solutions for the incoming government after the conclusion of the Lok Sabha elections. Firstly, the government could form a dedicated panel to discuss model legislation in consultation with industry stakeholders. Alternatively, the government could release a discussion paper on the subject within the first 100 days of forming the new administration.

Additionally, the BWA has urged the government to revisit the existing taxation framework for cryptocurrencies. The association argues that the current levy of 1% tax deducted at source (TDS) and 30% capital gains tax, without provisions for offsetting losses, has failed to achieve its intended purpose of monitoring suspicious transactions. To address this, the BWA suggests reducing the TDS to 0.01% and rationalizing other norms.

One of the key points emphasized by the BWA is that the Web3 ecosystem extends far beyond cryptocurrencies like Bitcoin. The association highlighted that India is home to over 1,000 Web3 startups, making it one of the largest Web3 ecosystems globally, accounting for 12% of the world's Web3 developers in 2023, up from just 3% in 2018.

The BWA stressed that the Web3 landscape encompasses various blockchain networks such as Ethereum, Polygon, Solana, and Polkadot, as well as emerging areas like decentralized finance (DeFi) and non-fungible tokens (NFTs). As a result, the association has recommended that the Startup India initiative under the Department for Promotion of Industry and Internal Trade (DPIIT) should expand its subcategorization beyond 'Bitcoin & Blockchain' to accurately reflect the breadth of the Web3 ecosystem.

Furthermore, the BWA has suggested that the Office of the Principal Scientific Advisor should focus its research efforts on blockchain technology, DeFi, virtual digital assets (VDAs), and NFTs to spur innovation within these domains. This approach could potentially help India establish itself as a global leader in the rapidly evolving Web3 space.

In their efforts to promote a conducive environment for the growth of the Web3 industry, the BWA has emphasized the importance of collaboration between various stakeholders. This includes engaging with government agencies, regulatory bodies, and industry participants to develop a comprehensive framework that addresses the unique challenges and opportunities presented by Web3 technologies.