March 4, 2020, was a historical date for the cryptocurrency industry and crypto enthusiasts in India. The date is significant as the highest judicial authority, the Supreme Court of India, announced the lifting of the banking ban in India.
The decision came after two years of a banking ban faced by Indian cryptocurrency users, traders, and exchanges. The judgment opened doors to massive crypto adoption in the country.
The enthusiasm of virtual currency in India can be made of the fact that lakhs of new Indians got themselves registered on different cryptocurrency exchanges for trading. We need to understand the reason for curiosity among people in the country towards crypto trading. What is it that they have understood and others have not.
Cryptocurrencies run on a technology that is sworn by many – Blockchain. The technology allows for the decentralization of value transactions, makes it accessible yet secure, transparent yet tamper-proof, and traceable, thus making it a perfect solution for many business verticals.
The blockchain handles the trust factor without any third party to make sure things are going smoothly. It is decentralized, which has multiple benefits—any bank failures or collapses do not impact the currency, it is immune to inflation or deflation, involves minimalistic cost while making cross border payments, among many more. When we see from the investment point of view, while other investment avenues have failed in the current lockdown, cryptocurrencies have fared better on exchanges.
On the other side, blockchain and cryptocurrency combined can create an ecosystem that will generate millions of jobs for the youths of the country.
Virtual currencies can boost the country’s ‘Digital India’ ambitions
On one side, many developed nations have already recognised and regulated cryptocurrencies. The blockchain and crypto industry is growing at a significant pace in those countries. Despite numerous advantages, India is yet to acknowledge digital currencies. There is a small section of society that carries an incorrect notion - that transacting in digital currencies aid in criminal activities. Whereas, factually, it is easy to track the movement of the virtual currency by the investigating authorities leading to low chances of any unlawful activities.
We need to understand, innovation or technology can be perceived as a vital tool or a weapon depending on how it is used. When email was invented, it was exclusively used by the US military. At that time, the belief was, if emails are allowed to be used widely, it could disrupt the entire postal and telegraph infrastructure system. Had regulators at that time prohibited or restricted the use of emails, we would be living in different times. What we fear today may become essential for us tomorrow.
The peer to peer transactions is another such example in India. The industry, which had to go through a tough phase during its initial days, is now seen as a sunrise sector. It is filling the gap that banks haven’t been able to fill.
While the lifting of the banking ban is the crucial step in India’s adoption of cryptocurrencies, it is only the start. For better development of the digital economy, the government and regulators must develop regulations around the technology. Jointly they need to look positively at the potential of cryptocurrencies and blockchain. It is only then the economy and industry will reap its benefit. Once favourable regulations are in place, it will give all of us a platform to innovate, and the whole nation can participate in the crypto revolution.
Along with intelligent regulation, there is a missing link of awareness that needs to be fixed. The substantial set of the population in India is fascinated by the technology but don’t understand it well enough. Many still don’t know that trading in cryptocurrency is as simple as trading in any equity stocks on stock exchanges. To bring a wave of blockchain and crypto adoption, awareness drives at a large scale needs to be organised that can highlight its benefits, career opportunities, trading tips among others.
The entire blockchain and digital currency industry have to come together to educate the large section of India’s population. At the same time, awareness will help protect people from scams or frauds. Smart regulation and mass education are going to bring a blockchain and crypto revolution in the country.
Now is the time to prepare India for the next bull-run and can lead to becoming a crypto hub across the globe. The segment will grow as the new age investment platform for people who are looking beyond the investment into the stock market, mutual funds, bonds etc. The adoption of crypto will help the government to achieve a five trillion-dollar economy. It will not just generate a billion-dollar business, but it will also give employment to lakhs of people.
Sumit Gupta is the co-founder and CEO of CoinDCX. The views in this article are his own.