Why India Can’t Afford To Sit Out The Crypto Race? (2024)

“The right crypto regulation will push India ahead in this innovative technology while wrong regulation such as a ban on Crypto will set our country back by a decade.”

Nischal Shetty, WazirX

At the time of writing, the global crypto market cap stood at $1.77 trillion, a 5.86% increase over the day before, with Bitcoin, Ethereum, and Binance Coin leading the pack. The market cap surpassed the $2 trillion mark a few months back, riding Ethereum & Bitcoin rallies– fuelled by Elon Musk’s tweets & NFT craze. In India, RBI has been backing and filling on the question of cryptocurrency regulation. Earlier, the Supreme Court lifted the ban on trading in cryptocurrency in the country.

“The Indian crypto market has flourished since the onset of the pandemic, with a clear shift being witnessed in terms of investment patterns and more Indians in the 25-40yrs age group have begun trading in cryptocurrencies. We have also recorded an increase in new user sign-ups and enhanced trading volumes,” said Sumit Gupta, Founder & CEO, CoinDCX.

Recently, Congress MP Shashi Tharoor pushed for a transparent and effective regulation of cryptocurrency in an article. He made a case for why India can’t afford to miss the crypto boat.

“We’ve seen an increase in investors learning about crypto assets and invest in them. At ZebPay, we have seen over a five times increase (year-on-year) in the number of users from last year. This is in spite of the lack of clear regulation around crypto,” said Avinash Shekhar, Co-CEO, ZebPay.

“Today, the crypto community consists of over 10 Million HODLers, 300+ startups generating tens of thousands of jobs and hundreds of millions of dollars in revenue and taxes,” said Nischal Shetty, CEO & Founder, WazirX.

India’s position

Blockchain-based technologies are changing digital transactions across the world, with DeFI gathering steam in the last decade. However, many governments have raised concerns over the crypto’s potential to rupture traditional financial systems, tax evasion loopholes, and its decentralised nature.

“We respect the concern the banks may have around Anti Money Laundering policies, and discussions around the same will make the industry stronger, and investors and investments safer”

Sumit Gupta, CoinDCX

Blockchain technology is not just about crypto and NFTs, but extends to payments, healthcare, cybersecurity etc. Around 50 percent of the Indian states are utilising blockchain technologies, with Tamil Nadu being the first. Niti Aayog has already come out with a policy paper, ‘Blockchain: The India Strategy — Towards Enabling Ease of Business, Ease of Living and Ease of Governance’. Blockchain tech can be a game-changer in the longer run.

“Blockchain technology along with Cryptography and proof of work has the potential to revolutionise finance, healthcare, agriculture, and many other industries,” said Avinash. “World over, there are lots of innovations happening around crypto. India has the potential to take a leading role in this innovation and build the next trillion-dollar companies. However, the regulatory uncertainty and lack of banking support are holding back the individuals and institutional investors.”

Also Read: 8 Blockchain Startups In India

With so much at stake, India cannot afford to lose out on the huge crypto opportunity.“Since 2018, when the Reserve Bank of India (RBI) prohibited banks from dealing in crypto-assets, we, along with other industry bodies, have been engaging in industry dialogues with policymakers and investors to raise awareness and address their concerns”, said Sumit. “Moreover, with increased awareness and interest from the investors, we see a possibility of the government considering forming a panel to regulate cryptocurrencies as digital assets rather than tokens.”

According to a news report, India’s leading cryptocurrency exchanges, including WazirX, CoinDCX and CoinSwitch Kuber, have collaborated with the Internet and Mobile Association of India (IAMAI) to set up an advisory board to implement a code of conduct for the crypto industry. In the last few months, many banks and payment gateways stopped dealing in cryptocurrencies in the light of unclear regulations.

The Centre has plans to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which is said to have provisions to ban the use of cryptocurrencies. So far, the government has been giving mixed signals on the crypto regulation. That needs to change.

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