Cryptocurrency in India
From being outright from ban in 2016 to an upcoming regulatory bill cryptocurrency has influenced everyone in some way or the other. India is one of the world’s fastest growing cryptocurrency market for crypto trading, holding and investments in the digital assets. The stance of government of India on cryptocurrency has changed significantly over the past few years. So what the new deal for the decentralized digital currency which has gained popularity in the financial sector, whose creators are unknown?
Though the regulations for cryptocurrency in India are still unsure the investors in the cryptocurrency have been increased since last year, Bitcoin the most popular crypto alone has seen a drastic increased from April 2020 to May 2021. The old law seemed like imposing a complete ban on the crypto activities like mining, holding, trading, the new might make a complete contrast of the previous law to categorize the digital assets as a currency.
The technology on which the cryptocurrency operates (Blockchain) has gained it advantages primarily due to its network effects and proven security. Cryptocurrencies are becoming more exchanged, accessed through merchant software and hardware support. Currently there are no regulations for any bans or usage of cryptocurrency in India, RBI’s regulatory for other banks from banning cryptocurrency transactions was reversed by Supreme Court in an order in March 2020.
Government Bill of 2021
The Government of India is set to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 during the Winter Session Parliament. There were some false speculations in the past about completely banning of cryptocurrency by the government, but through several reports by the official sources it has been made clear that the Government of India may allow crypto trading and investment under certain restrictions.
As claimed by the crypto experts, completely banning of cryptocurrencies won’t be possible. Perhaps, the government may put some restrictions on usage of cryptos as trading and mode of exchange or payments. Cryptocurrencies operate on blockchain which are not controlled by any single/central entity, this decentralized characteristics of the technology separates it from other digital assets or currencies that are controlled by a single entity.
How is cryptocurrency market in India
A chainalysis report shows India as the rapidly growing market in the region, the Indian crypto market has grown nearly 600% since July 2020 to June 2021. The fourth-largest crypto market in the whole of Asia, shows more than $600 billion of transactions done during the period that makes 14% of the global crypto transactions. Over $10 million transactions were i.e. 42% of the total central and southern Aisa’s were done from India, while 29% from Vietnam and 28% from Pakistan within a year.
This shows how mature Indian market is in the cryptocurrency which has a relatively young and tech-savvy population following Vietnam in adoption by retail investors in the region.
Concerns of India related to cryptocurrency
The Reserve Bank of India sets out thoughts that these digital currencies may bring serious threats to the nation’s financial stability and macro-economy. India’s currency is partially convertible giving the regulatory insight and control over who can access the market. These digital currencies are designed to be traded freely without having central authority oversight or taxable transactions.
This decentralized currency is allowed to exchange or payments might lead to unethical use of funds for such as money laundering, terrorism financing, purchasing of illegal stuffs, etc. these type of issues have been raised in the past in other countries.
What are the current regulations for cryptocurrency in India
Over the past few years India has had hot-n-cold relationship with cryptocurrencies. From 2018 complete ban to removal order in March 2020 by the Apex Court in India, with call for stricter rules for holding and operating in the digital assets.
The unregulated environment may draw more domestic household savings into the volatile assets, causing the average savers to crash vulnerably. There has been an expert’s claim the government of India may come up with a bill by end of 2021, for regulating the usage of cryptocurrency under some limitations.
What would be the bill like and time frame
It’s unclear yet, the parliament’s website had a brief description, “seeks to prohibit the private cryptocurrency in India, along with certain exceptions to promote the underlying technology and its uses for other sectors. However, there are some reports saying that the government may allow cryptocurrency as a digital asset and restrict the value for investing to a minimum amount, but not be used as a legal tender.
As stated by Finance Minister, Nirmala Sitharaman – “We want to make sure there is a window available for all kinds of experiments happening in the crypto world. It is not we are going to look inward and say we are not going to have any of this, there will be a balanced position.
The bill is being estimated to be passed by end of 2021, so it needs to be finalized before Dec 23, when the winter session of parliament ends. Simultaneously, the government also intends to support the RBI’s move towards creating and official digital currency for the nation. This move has been initiated by the central banks of other nations around the world as well.
Currency exchange for cryptos in India
The most liked feature by the people is the liquidity of the cryptocurrencies, they can convert their holdings into cash anytime they want to exit their investment or various other reasons. As these are decentralized digital currencies which are not controlled by any single authority, you can exchange them anytime by using various reputed exchange platforms like CoinDcx.
These platforms are just like the banks apps which you use, you need to complete your KYC-verification and start your investment and trading from the first day.
We soon expect to get some regulations and guidelines that would make the picture much clear about cryptocurrency market in India. We are also excited about the new digital currency that is being claimed to be launched by the Reserve Bank of India very soon.
We will update about the crypto as soon as we get a complete news about the latest digital currency of India.