On one hand, India is planning to regulate cryptocurrency, while on the other hand, the industry is attracting more users. Till May 2021, the total crypto investment in India reached near $6.6 billion. Compared to April 2020’s market value of cryptocurrency, which was $923 million, the recent development by the crypto industry is overwhelming.
The blockchain analysis firm, Chainalysis, released data specifying that out of 154 countries, India is at the 11th position for investing in cryptocurrency.
Apparently, the crypto market started picking up its pace in India in 2019-2020, and now the industry waits for more potential investors.
India is the second most populated country in the world. However, compared to China, which is the most populated nation, India has the biggest youth population. These millennials and Gen Z people are more inclined towards cryptocurrencies.
It is good that the crypto industry in India is growing, as it shows the country is on the path of technological development. But the problem is, till date, the Indian government has not introduced any framework for regulating digital assets in the country.
India’s Love-Hate Relation With Cryptocurrency
India has a bit complicated relationship with cryptocurrency, which started in April 2018, when the Reserve Bank of India (RBI) imposed a blanket ban on cryptocurrency. This decision brought in a lot of difficult times for the crypto exchanges that were operating in India.
In order to remove the ban, the crypto exchanges came together and registered a plea in a Supreme Court regarding it. After so many hearings, the Indian Supreme Court, in March 2020, decided to revoke the ban.
The Supreme Court’s decision in favor of the crypto industry brought in a lot of opportunities for it. Indians see this decision as a green flag for the crypto industry but the government is still on the fence about decentralized digital money.
The government recently announced a panel which will manage the regulatory framework for cryptocurrency.
Currently, the crypto industry lacks regulation, which affects the investors and the companies associated with it, simultaneously.
Nischal Shetty, the co-founder of WazirX, recently said, “The biggest regulatory risk is that bad players might come into the ecosystem. While we, at exchanges follow a regulatory code of conduct, which is self-imposed, we cannot prevent others who don’t follow it.”
Cryptos Getting Global Acceptance
In India, cryptocurrencies are only used as an investment, however, in countries like the US, many organizations accept Bitcoin as a means of payment. Apart from this, Africa introduced Bitcoin ATMs and Mobile-cryptocurrency payments for their citizens.
Due to its regulatory issues, India has not yet decided to accept these digital assets as a means of payment. However, this issue could easily get resolved if the RBI and the Indian government introduces any long-term plan for cryptocurrencies.
While talking about cryptocurrencies getting global acceptance, Avinash Shekhar, the co-CEO of ZebPay, said, “The global cryptocurrency ecosystem is growing rapidly with many projects and innovations happening. These are investors, innovators, and businesses that offer job opportunities for many. Regulatory clarity around crypto can definitely help grow the crypto ecosystem in India.”
The Finance Minister of India, Nirmala Sitharaman, has recently hinted that during this monsoon session, the government will present ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021′, in the Parliament. It is being speculated that if the bill gets approval then it might ban all the private cryptocurrencies in the country.
Also, after the introduction of the bill, there are chances the government presents a legislative framework for the country’s own digital currency.
A few of the market experts believe that presently, the government is working on the digital rupee, therefore, till date, it has not announced any regulatory framework for cryptocurrencies.