Description: In a recently published Esya Centre report “Virtual Digital Asset Tax Architecture in India: A Critical Examination”, we show that the main (unintended) impact of the tax policy on Indian VDA industry is offshoring of domestic business and liquidity to foreign exchanges. This report, extends the earlier work by examining – how the tax architecture changed the risk exposure of investors trading on centralised VDA exchanges in the country. That is, it provides quantitative estimates of potential loss from business activities currently underway or planned in the VDA industry in India. This is a pertinent policy problem with profound welfare implications, given the scale of investor participation in VDA markets.
Attribution: Dr. Vikash Gautam. Impact of VDA Tax Architecture on Risk Exposure of Indian Investors. Special Issue No. 209, February 2023, Esya Centre.