Did someone tell the super-rich of India that one can avoid paying taxes if they own Cryptocurrencies?
Around 18 percent of Indian super-rich, popularly known as ultra-high-net-worth individuals (UHNWIs) invested in crypto assets last year amid the rising popularity of cryptocurrencies and NFTs, according to a Knight Frank report. The UHNWIs are those who have a net worth of USD 30 million (about Rs.226 crore) or more. In its Wealth Report released on Tuesday, Knight Frank said 18 percent of global UHNWIs now own cryptocurrencies or tokens, and 11 percent have invested in NFTs (non-fungible tokens).
“In the case of India, 18 percent of the ultra-wealthy have invested in crypto assets. 10 percent of them being invested in cryptocurrencies/ tokens and 8 percent being invested in NFTs,” Knight Frank India said in a statement. In 2018, when The Wealth Report first explored the potential of blockchains, the building blocks of cryptocurrencies and NFTs, a third of the survey respondents said they doubted their clients had even heard of them and just 14 percent reckoned that blockchains would significantly influence how wealth was managed.
“2021 was the year that crypto investments went mainstream. The sector’s growth was certainly eye-watering. According to The Economist magazine, the global value of crypto-assets was USD 2.4 trillion at the end of 2021, a 12-fold increase since early 2020,” the report said.
There are now more than 8,000 cryptocurrencies in circulation for investors to choose from, as well as myriad NFTs, it added. A third of survey respondents said security concerns were behind their reluctance to invest. But the biggest stumbling block — cited by over 60 percent — is that UHNWIs still do not understand the market sufficiently well to feel confident enough to jump in. “Volatility is also a significant concern, although for many traders that are the main attraction,” the report added.
India’s Reserve Bank recently warned Indians from investing in “not yet legalized” cryptocurrencies. India’s Finance Minister Nirmala Sitaraman’s also echoed the same after taxing 30% of the digital currency trades.
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