India's BJP Calls for Bitcoin Reserve Pilot to Boost Economic Resilience

Pradeep Bhandari, a spokesperson for India’s ruling Bharatiya Janata Party (BJP), has called for the establishment of a Bitcoin reserve pilot program, highlighting the strategic importance of such a move in enhancing the country's economic resilience. Bhandari's proposal comes at a time when the global financial landscape is increasingly embracing cryptocurrencies, with the United States and other nations taking significant steps in this direction.

In an article, Bhandari pointed to the strategic Bitcoin reserves being developed by the US and Bhutan’s state-led mining operations as indicators of a global shift towards digital assets. He argued that India, with its expanding renewable energy infrastructure, is well-positioned to develop a sovereign Bitcoin strategy. Bhandari stressed that this move is not reckless but a calculated step towards recognizing the legitimacy of digital assets.

Currently, India’s approach to cryptocurrencies is characterized by heavy taxation without a clear regulatory framework. The government has imposed a 30% flat rate tax on virtual digital assets (VDAs) like Bitcoin and Ether, with profits from selling crypto taxed at the same rate. However, there are no provisions for deducting other expenses or losses, and a 1% Tax Deducted at Source (TDS) applies to all crypto transactions above a certain threshold.

During India’s G20 presidency in 2023, the government coordinated a crypto working group with the International Monetary Fund. Bhandari noted that while recommendations from this group are still pending, other nations, including Russia, China, Brazil, and the US, are not waiting for a consensus to advance their crypto efforts. The US, for instance, has plans to expand its Bitcoin reserves through budget-neutral purchases, and several US states have already authorized Bitcoin as a reserve asset.

Bhandari believes that a Bitcoin reserve pilot could bring regulatory clarity to India’s crypto landscape, fostering transparency and oversight while enabling innovation and protecting investors. He suggested that such a strategy could strengthen India’s economic resilience and project a modern image on the global stage. Bhandari’s call for a measured Bitcoin strategy underscores the need for India to keep pace with global trends and leverage its strengths in renewable energy to become a leader in the digital asset space.