Indian crypto platforms on track with expansion plans
18:35, 20 February 2022
Indian cryptocurrency investment platforms seem unfazed by the government’s rhetoric and are going ahead with plans to scale up – especially in hiring experts. Headhunters said they witnessed a significant surge in demand for human resources in the past 12 months.
Officials at India’s central bank made it clear that “banning crypto was the most sensible option” even as the finance minister of India decided to tax crypto earnings in her newest budget.
“The sentiment on the ground is positive and after this (tax) announcement; people who were on the fringe on investing in crypto in India, especially the retail investors, are now showing a lot of interest and all these exchanges are witnessing a very big inflow of new customers being added to their platforms,” said Anshul Lodha, head of Page Executive India.
“Because there is a lot of interest now in crypto from an investment perspective, all these platforms are definitely reinforced to build out teams,” he added.
Does taxing render legality to crypto?
Indian finance minister Nirmala Sitharaman on 1 February announced the government’s decision to tax profit on cryptocurrency gains at a hefty 30%. An additional 1% tax deducted at source was also announced, which meant the seller received the proceeds minus that percentage in a transaction.
Losses in digital asset transactions were not allowed to be squared against profits in other investments that would have possibly reduced the tax potential liability of investors.
Nevertheless, India’s crypto ecosystem was quick to make its exuberance known as the declaration lent the much elusive ‘legality’ to their world.
Head of Page Executive India Anshul Lodha – Photo: Anshul Lodha/LinkedIn“The Budget 2022 has, for the first time, acknowledged crypto as ‘virtual digital asset’ (VDA). The new tax framework for VDA, although akin to a speculative transaction and not sector-friendly, at least now recognises them in the tax law. This is a step in the right direction to address some of the open issues on such transactions,” said Ravi Mehta, managing director and Amrita Bhatnagar, associate director at RBSA Advisors, an equity valuation services firm.
The three weeks following the budget also saw T Rabi Shankar, a deputy governor of the Reserve Bank of India (RBI) calling for a total ban on cryptocurrency activity in the country, adding that “it was worse than ponzi schemes”.
Sitharaman herself had likened it to gambling and betting on horses.
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Market expects clarity from government
The market expected Sitharaman to provide clarity on the government’s locus standi on digital assets build through cryptocurrency and blockchain technologies in the federal budget.
Cryptocurrency transactions surged in the past two years with some estimates saying it reached over 100 million users with a total investment upwards of $5bn in value. India is believed to be the fifth-largest market for cryptocurrency investors.
While uncertainty in the industry’s future is palpable as at least four digital currency investing platforms refused to speak to capital.com, experts and analysts say that the government’s decision to tax crypto earnings was well-received.
According to talent management sources, a lot more interest was evinced and many platforms experienced increased user on-boarding, reason enough to expand their capacities with reinforced confidence. Many believe that individual investors on the fringe may join the bandwagon sooner or later.
Platforms look to professionalise
There has been a surge in hiring demand in crypto exchanges and organisations focused on building applications and solutions for investor interfaces. Human resource managers are experiencing increased demand in Indian blockchain ventures that support global crypto platforms.
“A lot of founder-driven cryptocurrency firms are now looking to professionalise the management because they have to raise their profile. So there is a lot of demand for senior leadership hiring in these companies, but a majority of it will be in technology and product,” added Lodha.
Crypto’s human resource requirement in 2021 was twice that of the previous year, across technology, products, commercial and marketing roles, sources said.
ABC Consultants technology senior director Ratna Gupta – Photo: ABC Consultants Private equity funds and venture capital investors want to get on the bus, which would not only intensify the demand for personnel but would also serve as a shot in the arm for the industry. Lodha added that interest from venture capitalists to hire talent for crypto-focused functions were on the rise. Some of these investors are looking to hire candidates from the crypto industry to join their teams to evaluate investment opportunities in the market.
“Across the entire start-up ecosystem, there is a massive demand for technology and product candidates. More so, for crypto for two reasons – one is the skills required in crypto are quite a niche, secondly, the segment itself is quite new, so professionals are still warming up to the idea of joining crypto platforms as it’s not perceived as a mainstream career option,” he said.
Wall Street offers on DeFi
“One area of specific interest has been decentralised finance (DeFi) space. DeFi is set to disrupt, if not done already, the traditional finance world,” said Ratna Gupta, senior director of technology at ABC Consultants. “The fact that most of the top financial firms on Wall Street now offer investment in crypto products due to client demand speaks volumes.”
“The exciting thing is the increased emphasis on building breakthrough solutions in the decentralised finance space on top of the existing blockchains,” concurred Gupta.
Despite the tax announcement, the regulatory framework and the guidelines under which cryptocurrency could operate still remain elusive. Speculations are rife that the government may bring transactions on digital assets under the goods and services tax ambit, the biggest source of indirect tax for the government –which remains a cause of concern.
The RBI on its part is in the process of building its own digital rupee based on blockchain technology and said it would be ready with it before March 2023.
“It is difficult to find someone who’s been there done that in the crypto space, unlike in the IT (information technology) sector. However, given the adoption and interest, we are sure the talent pool will be much larger in a couple of years down the line,” Gupta added.
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