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Indian government to expedite regulations in light of recent crypto boost.

It comes as no surprise when we get to know that India is one of the biggest markets for cryptocurrencies. Recently the amount of indians holding crypto has increased significantly, how will the government react to this?

Photo by Ewan Kennedy / Unsplash

Cryptocurrencies have had more influence than any other industry in recent years. Everybody wants to own crypto, which is seen as a get-rich-quick investment.

Countries like the USA and major European countries have already seen a massive influx in the number of citizens investing in cryptocurrencies. (1)

Even India, a country that was rather late in adopting cryptocurrencies, now has over 7% of its population owning decentralized money.

The influence of crypto in the Indian market

Crypto has not only been a source of income for those investing in it but has also led to various updates in how the Indian economy functions. These digital assets have had huge benefits in many sectors;

Bitcoin is the most influential crypto to date.

Employment growth

About 50,000 people are currently employed in the cryptocurrency sector. According to a survey, there will be many job openings in the sector by 2030, with estimates of over 800,000. India already has a sizable skill pool of Fintech and IT specialists.

The talent is moreover offered at reasonable prices. With the growth of the cryptocurrency sector, India has the potential to develop into a significant worldwide hub for the industry. In the BFSI, IT, customer support and service, as well as many other areas, this will assist generate a large number of job possibilities.

Enhance digital payments

Transactions with cryptocurrencies save time and money. The transactions are instantaneous since they are carried out directly between the sender and receiver without the involvement of a third party. Additionally, there are no longer any transaction fees assessed by middlemen like banks and payment gateways. Lowering the transaction's cost enables consumers to save money on each transaction. Therefore, cryptocurrency transactions can dramatically improve digital payments by reducing transaction time and cost.

Helping achieve the goal of Atmanirbhar Bharat

The government's proposal to create a single, recognized cryptocurrency will abolish the reliance on third-party, private, and foreign-based cryptocurrencies.

Many well-known cryptocurrencies, including Bitcoin, Ethereum, Dogecoin, and others, are currently based overseas. The nation's official cryptocurrency won't need to rely on other cryptocurrencies because it will be fully produced there.

The government will be able to achieve its aim of "Atmanirbhar Bharat" in the cryptocurrency sector with the assistance of investors, traders, and other people who will have access to a single cryptocurrency for their requirements. (2)

The 'self-dependent India

According to a report by UNCTAD, every fourteenth Indian invested in the new age asset despite the covid-19. (3)

According to Mohammed Roshan, CEO & Co-Founder, GoSats, the data demonstrated how crypto adoption had surged tremendously during the Covid pandemic globally, particularly in emerging markets like India. (4)

"The report mentions remittances and the fact that crypto was perceived as a way to protect household savings were the main reasons for the rise in adoption in emerging economies," said Roshan.

According to the most recent study, India already has the biggest number of cryptocurrency owners in the world, with 10.07 crore, making it possible to gauge the currency's appeal in the nation. India's population, particularly its youth, is accelerating the growth of cryptocurrency.

The government, debating and discussing the regulatory framework for private crypto assets in the nation, may have some concerns about the recent surge in the adoption of crypto assets.

Why is there a crackdown on cryptocurrencies by the government?

Crypto is an extremely volatile asset

The Indian government is debating a measure that could forbid private cryptocurrencies while establishing a framework for introducing an official digital currency by its central bank out of concern for financial instability.

Despite worries over the absence of sophisticated data privacy regulations, the Indian government expects a ban to allow the Reserve Bank of India, the nation's central bank, to control digital currency.

While Prime Minister Narendra Modi stated in November 2021 that cryptocurrencies might "spoil our youth," the central bank has frequently cautioned that cryptocurrencies could pose "severe concerns on macroeconomic and financial stability." (5)

The government has also warned that unregulated cryptocurrency marketplaces might develop into fraud, money laundering, and financing terrorism hubs.

The Directorate of Enforcement, an organization in India responsible for combating financial crime, looks into at least eight cases of fraud involving cryptocurrencies.

While the Enforcement Directorate (ED) recently seized bank assets of trading platforms like WazirX and Vauld, the Reserve Bank of India has publicly denounced these assets on multiple platforms.

The UNCTAD report emphasized the costs and hazards associated with cryptocurrencies and recommended that countries exercise greater care. Market players, however, asserted that there is no need for concern because all cryptocurrency transactions fall under the purview of the relevant regulatory bodies.

According to Subburaj from Giottus, any crypto regulation should address global, insurmountable operational issues and technological challenges. However, crypto, as of now, remains an individual, entity, or private risk.

What to expect now?

Market watchers stated that the government should expedite the passage of its crypto bill to develop laws in the best interests of all stakeholders, given the surge in cryptocurrency investment in India.

The government's policies must be favorable to individuals involved since only then will they be encouraged to pursue a career in this cutting-edge technology.

"India's crypto industry is too big to ignore, and a strong, business-friendly policy for the crypto industry will enable investors to trade with confidence and boost the morale of the young workforce willing to make a career in this space,"

Said Shivam Thakral, CEO, BuyUcoin.

When it comes to accepting cryptocurrencies and blockchain, the world is moving quickly, and India shouldn't pass up this once-in-a-lifetime chance to become the world's blockchain capital.