The spokesperson for the Indian People's Party proposes a Bitcoin reserve test program after the US allows three states to use BTC as a reserve asset.
Pradeep Bhandari, the spokesperson for the ruling Indian People's Party (BJP), has called on the government to consider implementing a Bitcoin reserve test program, believing it would be a strategic move to enhance economic resilience in the context of the global financial system shifting towards digital assets.
In an article published in India Today, Bhandari notes that the US strategic Bitcoin reserve and state-led crypto mining in Bhutan are important signals indicating an ongoing transformation. He argues that with expanding renewable energy infrastructure, India is well-positioned to develop a sovereign Bitcoin strategy.
"This is not a reckless shift," Bhandari wrote. "This is a calculated move to recognize the legitimacy of digital assets."
This proposal comes in a context where India's crypto policy remains "ambiguous". Bhandari points out that crypto in India is currently subject to very high taxes but is not regulated by any specific legal framework.
High Taxes but Lack of Legal Framework
The Indian government has applied a fixed 30% tax on virtual digital assets (VDA) like Bitcoin and Ether under Section 115BBH of the Indian Income Tax Act. Although purchase costs can be deducted, there are no provisions allowing deductions for other expenses or financial losses.
Additionally, any crypto transaction valued at 115 USD or more is subject to a 1% tax deducted at source (TDS), to be paid by either the buyer or seller. However, a comprehensive legal framework for these digital assets has not yet been established.
Bhandari notes that during India's G20 presidency in 2023, the government collaborated with the International Monetary Fund (IMF) to establish a working group on crypto. However, while recommendations are still being formed, other countries have proactively moved forward.
He cites examples of major economies like Russia, China, Brazil, and especially the US, which are not waiting for global consensus to act in the crypto space. The US government plans to expand BTC reserves through budget-neutral purchases, and three US states have already permitted Bitcoin as a reserve asset.
Bhandari emphasizes that India's path forward should begin by clarifying the legal framework, including a national Bitcoin reserve test program. He believes a transparent management framework will enhance oversight of this emerging asset class while paving the way for innovation and investor protection.
"India stands at an important crossroads," Bhandari wrote. "A controlled Bitcoin strategy – such as a reserve test program – can help enhance economic resilience and portray the image of a modern nation."
