- The Reserve Bank of India (RBI) issued a de-facto ban on all cryptos in 2019; a directive later overturned by the Supreme Court.
- The government is still deliberating on regulating cryptos; however, large uncertainty looms over crypto prospects.
- Crypto trade volumes have seen a steady increase which is now presently at about $1.5 billion.
India is the second-largest population, with the average age of its citizens being 25 to 28 bracket. With the mobile boom coupled with the cheapest data rates on the planet ($0.26 per GB compared to $12.37 in the US), more and more of them are now attracted to cryptocurrencies.
Few reports also suggest that one-tenth of all crypto transactions occurred in India. This puts India in a unique position leading to a palpable curiosity among millennials who view Bitcoins as digital gold.
Indians’ maverick moves
Call it culture or orthodoxy, Indians have traditionally turned towards gold as a dependable investment choice. This would seem highly unconventional to the Western world. Owing to the previously shunned practice of stocking up US dollars to hedge against possible Rupee inflation, gold was the asset of choice for a large set of the population. However, Gen Z people are more drawn towards innovation and tech trends, leading to their excitement with fast-moving cryptos, thus giving Bitcoins the name – “Digital Gold.”
The government’s vacillation
India has no shortage of crypto firms, with WazirX in the top spot and Coinbase, to establish a base in the sub-continent. According to estimates, about 10 million crypto users, out of which 1.5 million are actively trading, whereas 6 million are just HODling them. WazirX contributes to a mean of $55 million in daily trade volumes. 55% of it is conducted with Bitcoins.
India is the largest receiver of remittances, with an inflow of close to $79 billion annually. However, cryptos do not contribute as much due to a general feeling of uncertainty as older generations are generally unaware. Moreover, crypto remittances also receive a cold shoulder from the government.
However, things are looking up for enthusiasts in the country. Finance Minister Nirmala Sitharaman said that the government is taking a calibrated approach towards cryptos. The Ministry of Corporate Affairs has also issued a directive asking all companies to report their crypto holdings. Even though the government is uncertain, the established crypto industry is trying hard to convince the legislature of its benefits.
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