Burgeoning Cryptocurrency Market in India and RBI efforts to regulate it
The switch over to India started when China started to come down heavily on the Cryptocurrency market.
Ahead of the winter session in the Parliament, it is expected that the Government of India will bring forth a new bill to regulate cryptocurrencies. Earlier there were talks that there will be a complete ban on cryptocurrencies. However, this is not possible today. According to experts, the cryptocurrency market has burgeoned and become too big to effect a ban. More than 20 million Indians have already dipped their hands in cryptocurrency. According to Vincent Lau, Huobi Global, India has become the fastest-growing cryptocurrency market in the world.
The switch over to India started when China started to come down heavily on the Cryptocurrency market. China had started regulating cryptocurrency mining activities and stopped all forms of Crypto trade. Today Crypto Currency is proliferating at a very fast rate in India.
The crypto coin sector has already spawned two Unicorns this year, Coin DCX and CoinSwitch Kuber. Today startup CoinSwitch Kuber has become the 30 Indian Unicorn with $260 million funding. Crypto Exchanges made in Digital Stockbrokers in terms of the user base has also come into existence.
Today, WazirX has more than 8.5 million users while CoinSwitch Kuber has more than 11 million users. Both have more users than India’s largest stock Broker Zerodha which has 7 million users. It is amazing how things have turned out for the crypto trade in India. In March the mood was very hostile and many expected the Parliament to enact rules to ban the crypto trade altogether.
However, it seems that the government has blinked after seeing the size and scope of the crypto market. The tone is more conciliatory and there are talks to regulate the cryptocurrency market and protect the interest of the investor. Gone are the talks about banning cryptocurrency in India.
In March last year, the Supreme Court had quashed an RBI circular debarring clients from providing services to cryptocurrency exchanges. The scene today is completely different from what it was a year ago. Today Cryptocurrency news hogs the headlines of most Business News Papers.
CoinSwitch Kuber and CoinDCX are being promoted by major Bollywood stars like Ranbir Singh and Ayushman Khurana. Bitcoin is being hailed as a great investment. Bollywood personalities are also launching their NFT or Non Fungible tokens which are bought and sold using cryptocurrencies.
According to rough estimates, Indians have invested Six Lakh crores cumulatively in crypto-related assets. The current surge in Cryptocurrency trade is fuelled by young investors in tier two and tier three cities who are investing heavily in Bitcoin, Ether, Cardano and other Crypto tokens.
Having said that the pitfalls of cryptocurrency like extreme volatility and potential use by criminals and terror organization to finance their actions still remains intact. It needs to be seen how the RBI seeks to regulate the cryptocurrency trade and ensure that the interests of the investors are fully taken care of.