Crypto brain drain is ‘Crazy' in India, Polygon co-founder says

tech.hindustantimes.com:

India’s dithering on whether to embrace digital assets is causing thousands of developers, investors and entrepreneurs to leave for places with more friendly regulation, according to the co-founder of the country’s most famous crypto startup. 

“The brain drain is absolutely crazy,” Sandeep Nailwal, whose Polygon operates the biggest so-called Layer 2 protocol for the Ethereum blockchain system, said in an interview from Dubai.

India, with an estimated 15 million active crypto users, has been stuck in regulatory limbo since the Supreme Court in 2020 overturned a central bank ban on digital tokens. The government this year unveiled a tax on crypto transactions without formally declaring that it won’t ban trading, a move that became emblematic of the confusion. 

On Tuesday, Finance Minister Nirmala Sitharaman said the government has yet to make a final call on whether to ban virtual coins or regulate them. At the same time, she acknowledged the industry’s potential as a source of tax income: “Many Indians have seen a future in it, therefore I see a possibility for revenue in it,” she said. The government imposes a 30% tax on digital coin transactions. 

Nailwal, who co-founded Polygon in 2017, relocated to Dubai two years ago. The emirate is aspiring to be a crypto hub for the Middle East -- just as it is for traditional financial services -- and on Wednesday, it adopted a law for regulating digital assets. 

Polygon’s eponymous protocol is used by developers to make Ethereum transactions cheaper and faster. It has some 7,000 decentralized apps (or dapps), more than 130 million unique users, and handles over 3 million daily transactions. In February, Polygon raised $450 million by selling its Matic token to investors led by