Cryptocurrency: A digital revolution in the Indian market
After the Indian Supreme court lifted the RBI ban on crypto transactions, the country has seen a substantial increase in retail investors. The past year has been through a number of roadblocks as far as the Indian crypto market is concerned. There have also been reports suggesting that the country might try to ban or otherwise restrict the usage of crypto.
Unaffected by the legal ambiguities in the country and the huge volatility in prices, India has the highest number of crypto owners in the world – 10.07 crore. Around 15 million Indians are estimated to have invested in private cryptocurrency holdings. Cryptocurrency investments in the country rose from $923 million in April 2020 to almost $6.6 billion by May 2021 – 400% in only one year.
India, Vietnam, and Pakistan are in a way leading the expansion of the cryptocurrency markets in central and southern Asia. India’s market grew 641% over the past year. Not only the cryptocurrency investments and trading. There has also been an increase in the usage of other decentralized finance tools. India is responsible for 59% of the activity taking place across various decentralized finance (DeFi) platforms. Cryptocurrency-related entrepreneurship and venture capital investment have also seen a significant rise in the country. Large institutional-sized transfers above $10 million worth of cryptocurrency represent 42% of transactions sent from India-based addresses. This is a clear sign that India’s cryptocurrency investors are part of larger and more sophisticated organizations.
The number of users on India’s various crypto exchanges has gone beyond that of the largest stockbroker in the country, Zerodha. It has over 7 million users and the crypto exchanges Coinswitch Kuber and WazirX have 11 million and 8.3 million users respectively.
It has been consistently seen across the globe that it is the younger people who are leading the change as far as crypto adoption is concerned. More than 40% of users throughout the world are people aged between 18 and 34. Same is the case for India. With various discussion forums, platforms, and social media, there has been a certain awareness of the possibilities of cryptocurrencies and the benefits of the same. With the ease that the platforms offer for trading, it comes as no surprise to see the youngsters readily choose the new way of investment.
It has been a bright picture to witness that not only the metropolitans, but the smaller towns in India have been leading the cryptocurrency acceptance in recent years. The Tier 2 and Tier 3 locations have shown an increase of 2000% on crypto exchanges.
India has the potential to be a leader in the adoption of the blockchain technology that cryptocurrencies are based on. If the business and government bodies take the right steps, the picture is sure to be different in the coming five years.
In February 2021, a bill on banning ‘private cryptocurrencies’ was slated to be introduced in the Budget session of Parliament. The bill never got tabled. This makes the government’s sentiment around crypto unclear. If not banned, the government sure plans on regulating the cryptocurrencies in India.