India Urged to Adopt Sovereign Bitcoin Strategy

India is being urged to follow the lead of the United States and Bhutan by adopting a sovereign Bitcoin strategy. Pradeep Bhandari, a spokesperson for India’s ruling Bharatiya Janata Party, has publicly advocated for the establishment of a national Bitcoin reserve. This proposal is inspired by the strategic Bitcoin reserves of the United States and Bhutan's state-led Bitcoin mining operations, which have capitalized on their abundant hydropower resources.

Bhandari suggests that India could create a Bitcoin reserve holding between 5,000 and 10,000 BTC, funded without relying on taxpayer money and managed with institutional-grade security. He argues that India’s extensive renewable energy resources and robust IT infrastructure make it well-suited for a national Bitcoin mining initiative. Such a move could contribute to energy independence, stabilize reserve volatility, and foster participation in the expanding digital asset market.

However, India’s current regulatory environment poses significant challenges. Cryptocurrency gains are taxed at a flat 30%, with additional tax deductions applied at a rate of 1% on transactions exceeding a certain threshold. Despite this, India lacks a comprehensive regulatory framework governing exchanges, mining, and government reserves. This regulatory uncertainty, coupled with high crypto taxes, has hindered India’s progress in the digital asset space.

Bhandari’s proposal comes at a time when the global context is rapidly shifting. The International Monetary Fund has classified Bitcoin as a capital asset, and several countries, including Russia, China, Brazil, and the United States, have advanced their national crypto strategies. During India’s G20 presidency in 2023, the government facilitated international crypto discussions, but other nations have accelerated their actions while India continues deliberations.

Bhandari argues that establishing clear regulations and launching a sovereign Bitcoin reserve pilot could enhance India’s economic resilience and modernize its financial infrastructure. He believes that a Bitcoin reserve pilot could bring regulatory clarity to India’s crypto landscape, enabling innovation and protecting investors by providing transparency and oversight. By emulating Bhutan’s model of using surplus hydropower to mine Bitcoin, India could leverage its renewable energy resources to create a strategic Bitcoin reserve, positioning itself as a leader in the global shift towards digital assets.