Crypto in India: What to Expect in the Near Future?
The demonetization in 2017 by the government had paved the way for a never-before interest in cryptocurrencies across the Indian subcontinent. During those days, about 10 percent of worldwide virtual currency trade was from India. However, post the demonetization, the Indian crypto space faced several obstacles, such as a lack of crypto exchanges.
Past forward to 2021, the market comes across as different. There is an active interest in crypto. There are new investors, and transactions using crypto are on the rise.
The Crypto Difference for India
The Indian investors seem to admire crypto currency’s unique features, including the obvious independence from the much-complicated banking system, convenience of use, worldwide recognition, etc.
However, the skepticism about crypto has again come to the forefront owing to reports of certain moves by the Indian government.
A Reserve Bank of India circular dated 2018 had directed all entities under RBI to stay away from any dealings with digital currencies. It was only in March 2020 that the mandate was set aside by the Supreme Court.
The lifting of the ban was an essential step for the Indian crypto sector. Furthermore, the ongoing pandemic had an adverse impact on the Indian rupee, which indirectly led to inflation. As crypto offers an edge from inflation, many viewed it as an alternative form of currency.
Prevailing Uncertainty
However, the future is still uncertain. Despite its potential benefits, there is a certain level of uncertainty looming around the crypto arena due to the governing bodies’ seemingly apprehensive actions.
In a recent parliament session, Nirmala Sitharaman, Indian finance minister, hinted at such a possibility. As per her, “The Government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.”
She added that the government is aware of blockchain’s potential benefits and understands the importance of a digital economy. Therefore, the government is likely to implement measures to assess the benefits of blockchain.
Amidst widespread fears of strict action by the government that may restrict the use of crypto across sectors, many investors are undeniably excited about its future potential.
It would be interesting to observe what is happening in the crypto space in the immediate future as the government is seemingly willing to propose and implement some regulatory measures. Although the governing bodies have clearly expressed their apprehension about the associated risks, they have also indicated how technologies such as blockchain could be integral for a digital future. Consequently, certain regulatory measures could be expected.
Positive regulations would further strengthen the already promising Indian crypto sector. Also, several start-ups are building blockchain-powered projects. Tech giants such as Facebook, P Morgan are also showing interest in crypto investments. Therefore, crypto in India has the potential to be mainstream.
So, it is undeniable that crypto has the potential, and it is here to stay. Many are optimistic about regulatory measures from the government.