From a developing country’s perspective such as India, experts seem to believe that cryptocurrencies can help benefit its financial landscape. Although financial uncertainty still prevails in the country, market behaviours suggest that future of Indian cryptocurrency market is promising.
According to Jaro Education, an online higher education platform, India already has the highest number of cryptocurrency owners globally at 10.07 crore. Reportedly, India’s population, which consists especially of youth, is helping drive the pace of cryptocurrency growth, from a global monetary context. “I believe Indian government has been forward thinking with its approach towards digital currency. Within a year of its announcement, the government has introduced pilots for both wholesale and retail markets. It shows that the government is open to digital currencies, and this will help boost the presence of digital currency including cryptocurrency in the country,” Prashant Kumar, founder and CEO, weTrade, a cryptocurrency-based platform, told FE Blockchain.
As per industry reports Bitcoin and Ethereum mainstream adoption would benefit the Indian economy, through potential reduction in intermediaries and lower transaction costs. However, post cryptocurrency exchange FTX’s collapse, spot trading volumes among Indian cryptocurrency exchanges witnessed a downfall. Insights from Vakilsearch, a technology-driven platform, have shown that Reserve Bank of India’s (RBI) launch of Digital Rupee (e₹) can be beneficial in this context through real-time account settlements, lower transaction costs, and boost of foreign trading.
“Central Bank Digital Currencies (CBDCs) could co-exist with cryptocurrencies, and complement stablecoins and commercial bank money by providing central bank accountability in the digital financial ecosystem. It is difficult to say how long-term adoption of Bitcoin and Ethereum would benefit the Indian economy, as it’s not yet officially recognised or legalised in the country. However, the potential advantage could benefit the economy by promoting efficiency and reducing the costs of financial transactions,” Sathvik Vishwanath, co-founder and CEO, Unocoin, a cryptocurrency exchange, stated.
Moreover, Indian sectors such as banking, financial services and insurance (BFSI), logistics, pharmacy, education, healthcare, among others, are expected to benefit from long-term mainstream cryptocurrency adoption. As stated by International Journal of Creative Research Thoughts (IJCRT), a research-based education centre, Indian government is expected to regulate cryptocurrencies at different stages.
Reportedly, Digital Asset and Blockchain Foundation of India (DABFI), launched by ZebPay, Unocoin, Searchtrade and Coinsecure have taken up the role to educate public on cryptocurrency through security checks, government-based identification checks, Permanent Account Numbers (PANs) or Aadhar IDs.
“I think the implementation of the cryptocurrency tax was a move that demonstrated India’s desire to take a progressive stance, but for FY24, it is time for the government to treat the cryptocurrency industry on a par with other assets. The achievement of public policy goals such as operational resilience, consumer protection, market conduct and contestability, data privacy, prudential stability, among others, will help necessitate a licensing arrangement and a set of regulations,” Vishal Sarin, professor, Lovely Professional University (LPU), an educational institution, mentioned.