Brain drain: Centre’s harsh policy prompts cryptopreneurs to look overseas

Chennai: Looks like the Indian crypto scenario is witnessing yet another brain drain with the Founders of WazirX moving off to Dubai, along with their families. Yes, after our engineers, scientists and doctors migrated for greener pastures, we are now seeing a host of crypto companies and talent moving off to friendlier shores.

Following the NPCI’s statement, payment service providers, ostensibly due to an over-abundance of caution over the government’s hostile stance on crypto, have begun severing ties with crypto platforms. Indian crypto exchanges can’t even find a third-party payment processor despite the newly-introduced crypto tax laws. This, combined with the harsh tax policy, is causing crypto platforms in the country to consider moving to more crypto favourable jurisdictions, with Dubai being a primary choice. WazirX is no exception to this reality.

Yes, the brain drain 2.0 has commenced. Not just the Wazir X founders, we are seeing an exodus of start-ups, crypto, NFT, blockchain and Web 3.0 talent flocking to Dubai’s shores. Factors like unclear policy decisions, a 30% tax bracket, TDS, overall ambiguity in all aspects, and conflicting reports/statements by regulatory authorities have not helped in any way.

Countries such as the UAE as well as Thailand are in the process of becoming next gen crypto hubs thanks to clear, positive regulations and policies. Not only investments, these destinations are attracting talent from across the world. Ironically, India being a technology powerhouse should have been able to harness this potential to build applications on blockchain technology, if only it had a favourable regulatory environment.

The uncertainty over India’s position on the blockchain and crypto space has cast a shadow over its future in the country. RBI Governor Shaktikanta Das has also taken a strong exception to the technology stating that crypto is a big threat to the country’s financial and macroeconomic stability. He even went to warn investors that the digital currency “does not have any underlying asset, not even a tulip”— referring to a 17th century Dutch tulip price bubble.

Young entrepreneurs are tired of waiting. India’s loss is turning out to be other countries’ gain as lucrative offers and regulatory clarity from overseas seem to be draining the talent from the country. Eventually, India will end up getting the short end of the stick.

As we mull over the situation, several Indian crypto companies, developers and founders are finding destinations such as Dubai to be a preferred points as they have a “sandbox approach,” something India lacks for crypto. Dubai’s proximity to India and open, transparent and friendly taxation regime for creators is a plus. And once, well-known founders or start-ups move, it begins to attract many others, creating a community.

With crypto friendly policies and environment, no dearth of crypto talent and strong and clear governance in place, Dubai is now becoming the default crypto destination. India is missing the bus here and these developments are yet another indication. Is this a harbinger of things to come?

(The author is Founder, India Blockchain Alliance)