In a first for the country, India's Finance Minister Nirmala Sitharaman unveiled the new tax on virtual digital assets and also noted the first timeline for the launch of a digital rupee (INR).
Sitharaman said in the budget speech: "There has been a phenomenal increase in transaction in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime." Sitharaman added the country will develop a digital rupee and issue it "using blockchain and other technologies; to be issued by RBI starting 2022-23. This will give a big boost to the economy."
The minister used the phrase "virtual digital asset," which the industry interprets as a term for cryptocurrencies and non-fungible tokens. The new tax and the digital rupee steps taken do not mean crypto is now legal in India, but several Indian firms viewed the moves as steps toward giving crypto assets legitimacy.
Here is the rest of the week in review:
Fidelity published a paper on Bitcoin (BTC) titled Bitcoin First, arguing that the world's largest crypto asset should be treated separately from the rest of the digital assets. The investment management giant's new paper argued that Bitcoin is fundamentally different from the hundreds of other digital assets trading in the market and no other digital asset will likely overtake the top coin "as a monetary good." Fidelity's paper also called Bitcoin a superior form of money rather than just a new technology, asserting it is the most "secure, decentralized form of asset and any improvement will necessarily face tradeoffs." The paper reads: "Bitcoin clearly possesses a lot of good qualities of money, combining the scarcity and durability of gold with the ease of use, storage and transportability of fiat." Fidelity believes Bitcoin enjoys all qualities of being a sound form of money, as it does not have an organization controlling it and does not pay a dividend or have cash flows. Fidelity added it sees Bitcoin as an entry point for traditional investors into the digital asset market and suggested that investors should consider it both an asset class and a gateway to other digital assets with venture capital-like features.
FTX announced Monday it raised a $400 million Series C funding round that brings its total raised to $2 billion and increases its new valuation to a whopping $32 billion. The Bahamas-based exchange completed its third fundraise in the last nine months, which included participation from Singaporean state investor Temasek, SoftBank's (OTC: SFTBY) Vision Fund 2, and Tiger Global. The firm does not offer services in the US, but it has become one of the world's largest digital asset exchanges, offering both spot trading and derivatives products. FTX has bolstered its war chest at a time when digital currency prices have plummeted considerably, leading to industry fears of a crypto winter, when prices crater as much as 80% from their record highs. But FTX CEO Sam Bankman-Fried told CNBC: "I think we're not entering a long term crypto winter," noting the recent crash was caused by expectations of upcoming interest rate hikes. He added the exchange is considering a potential public debut in the future. FTX plans to use the fresh capital to develop and launch new products.
Crypto prices rose to $1.89 trillion this week. For the majors, all ended in the green amid an upswing. In the top 100, the biggest decliners were Klaytn (KLAY), down 1.5%, and several stablecoins. The biggest gainers were GALA, up 63%, UNUS SED LEO (LEO), up 47%, and Quant (QNT), up 40%. Next week traders will watch if Bitcoin stays above $40,000.
The author owns a small amount of BTC.