Pi42 Co-Founders Advocate Derivatives and Futures Trading as Tax-Efficient Solution to Boost Crypto Engagement in India

In India, the crypto industry faces significant hurdles due to stringent tax regulations, which have contributed to a subdued growth trajectory. Recognizing the need for innovative solutions to address this challenge, industry leaders advocate for the adoption of futures trading in the crypto sector. Nischal Shetty and Avinash Shekhar, prominent figures in India’s Web3 landscape, emphasized the detrimental impact of the country’s crypto tax regime on investor participation. Speaking to Gadgets360, they underscored the importance of introducing services that alleviate tax concerns and foster greater interest in cryptocurrencies, despite their inherent volatility.

Drawing upon their experience, Shekhar and Shetty pointed to the success of crypto derivatives in capturing a significant share of trading volume. This success, coupled with growing demand for sophisticated trading tools within the crypto ecosystem, prompted the recent announcement of their futures exchange platform, ‘Pi42.’ Shetty emphasized the maturation of the crypto market and the increasing appetite for derivatives trading among Indian investors, highlighting the opportune timing for the launch of Pi42.

Elaborating on his point, the former ZebPay CEO noted that India contributed 90.7 billion smart contracts in the global derivates market in 2023 in derivative trading. In this type of trading, an underlaying asset provides the value for the derivatives, letting traders guess the price movements of the underlaying assets and finally going for the trade.

In spot trading transactions, holders trade on the current prices of tokens and pay one percent TDS on each transaction, whereas in derivatives and futures trading, holders can keep the assets with them longer – waiting for the asset to reach the speculated price point. Doing this, helps the traders save up on the one percent TDS deduction that they face in spot trading.

“We are at the potential brink of a bull market. We feel it’s important to create avenues for investors who want to participate in the crypto market in a tax efficient way. The idea for derivatives trading fits perfectly as this way, investors don’t have to directly own crypto if they don’t wish to but don’t want to be left behind either. It’s a great way to give them a glimpse into all the action happening in the crypto market,” WazirX’s Shetty

“Futures and derivatives are already a growing area of interest with lower spread and highly liquid markets. The modern-day investor is aware, well read and tech savvy. There are investors who know how to build a diversified portfolio to achieve financial security. The affinity towards virtual digital asses has grown owing to its decentralised ecosystem, and various use cases is what has sustained the interest of users,” Shekhar added.

Both the industry veterans are aiming to expand their Pi42 Futures trading exchange to other international locations now that it has debuted in India and capitalise on the demand of alternatives to traditional assets trading.