Despite the uncertainty over the future of cryptocurrency in India, as the nation awaits the unveiling of the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, in Parliament, the appetite for blockchain technology and cryptocurrency, in particular, among Indians appears to be fascinating.
Even if the broad consensus goes in favour of banning private cryptocurrency India, perhaps it won’t prevent users from dealing in it. The reasons for the recognition to cryptos and the massive investor response to this asset class are manifold: failed government policies, disillusionment with the banking system and unfair distribution of IT returns.
So why is crypto gaining popularity in India in recent years? One of the key factors is traditional Indian reverence for gold to save, and with increasing tech-savviness, crypto is emerging as a kind of digital gold. The advanced currency has opened up avenues for international transactions and democratised the currency.
Crypto is Probably the Best Solution for Many Things Going Wrong in the Nation
Even the world’s richest man, Elon Musk, has added #bitcoin to his Twitter bio and tweeted – “In retrospect, it was inevitable.”
There is huge potential that India can gain when bitcoin and blockchain go mainstream, and it is not restricted within the strict regulatory ambit. How can the country gain by championing decentralised cryptocurrencies? It can help safeguard national security, deter financial frauds, strengthen monetary policy, attract international capital, accelerate technological development and drive the nation towards becoming a global power.
Moreover, as blocks run on a peer-to-peer network, it helps keep corruption in check by tracking the flow of funds and transactions. Political arrogance and sales without invoices in our country are one of the biggest vices. This leads to creation of black money and a huge loss of revenue to the exchequer. The automated blockchain-based token system can be a great solution for these challenges the nation has been facing.
Further, India is one of the biggest inward remitters from many foreign nations, and there is expected to be a massive boom in remote work and remittances going forward. A significant amount of such transactions is lost in transfer, and currency conversion fee. Cryptocurrencies, however, save money and substantial time for both the remitter and the receiver, as it is conducted entirely on the Internet, runs on a mechanism that involves very less transaction fees and is almost instantaneous.
Crypto is the Financial Internet: Is it Wise to Distance from this Development?
Blockchains are about transferring value, as it enables a financial Internet that is digitizing commodities, currencies, stocks, real estate, bonds and every imaginable type of financial instrument. If we do not move in pace with the innovation, it would prevent all of that advancements and growth from happening in India. It is like banning the Internet or smartphones when they were launched. Can you imagine your life without the Internet and smartphones today?
Crypto can also reignite the entrepreneurial wave in India’s startup ecosystem and create job opportunities across different levels, from blockchain developers to designers, project managers, business analysts, promoters and marketers. Its greater adoption will also attract institutional investors to the promising world of cryptocurrencies. Furthermore, with crypto by her side, the country can bank the massive unbanked population. This is because cryptocurrency runs on a decentralised grid.
According to Coindesk, the total value of all cryptocurrencies is over $1.5 trillion and it is growing at a rapid pace from a total market capitalisation of just above $760 billion in late 2017. While crypto has the potential to strengthen the economy, national security, technology, currency & foreign policy, India has the talent to pull this off. A move by the country in favour of cryptos would attract global attention and support from the world’s financiers and technologists can put the country on the forefront of the rapidly evolving industry.
Sathvik Vishwanath is Co-Founder & CEO of Unocoin. Views are his own)