By Sumit Gupta
In 2018, RBI had passed a de-facto ban by directing Indian banks to suspend their organization dealings with Indian cryptocurrency exchanges. In March 2020, SC overturned the ban and permitted banks to resume organization with crypto exchanges. In early 2021, ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ was scheduled to be tabled for the duration of the Budget Session. It indicated that the government was exploring a Central Bank Digital Currency.
Currently, we have about 75 lakh investors in India with crypto assets more than Rs 10,000 crore. Most exchanges have self-regulatory practices. The typical every day cryptocurrency trading volumes across the leading Indian exchanges has grown by almost 500% considering that March 2020. India has also grow to be the second most significant Bitcoin nation in Asia, following China, and the sixth most significant in the planet, following the US, Nigeria, China, Canada and the UK, according to international cryptocurrency exchange Paxful.
Currently, the crypto market contributes drastically to wealth generation in the kind of job creation, earnings tax on earnings, investments from offshore players, amongst other people.
Recently FM Nirmala Sitharaman mentioned the government was hunting at a ‘calibrated approach towards cryptocurrencies’ and there would be ‘a window for crypto experiments’, which signalled a gradual transform in mindset. The use of crypto assets in key created markets is effectively accepted, exactly where all of them are attempting to create regulations rather than impose a ban. In international markets, the worth of a single Bitcoin has shot up to $57,000 with a marketplace capitalisation of $1.1 trillion.
A current report by the World Gold Council highlighted that crypto was the fifth-most well known investment tool in Russia, when Wall Street leaders are hunting to invest in this digital currency. Electric-car or truck maker Tesla not too long ago purchased $1.5 billion worth of bitcoins, accepting payments in cryptocurrency.
Instead of viewing such assets adversely, India can utilise a regulatory sandbox below Sebi and encourage market-friendly policies. By offering the correct regulatory framework, this large pool of assets can be funnelled into the mainstream economy. They can act as a funnel for anti-funds laundering and KYC norms, as effectively as serve as a key gateway to regulate cross-border transactions. With the inherent benefit of higher safety, transparency and instantaneous settlement of transactions, such a digital asset can prove to be a blessing for India.
Since each transaction by way of cryptocurrency and blockchain is totally verifiable, the payment technique can be used to fight corruption.
Under the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, reports indicate that India most likely aims to launch its personal CBDC. This measure will be in line with quite a few central banks.
In addition, India currently has an established blockchain and crypto developer ecosystem that can be leveraged to develop a actually robust collaborative CBDC solution.
By offering the correct regulatory framework, India will also allow the nation to fulfil its ambitions and targets of becoming a genuinely digital, Atmanirbhar, and $5-trillion economy.
The author is CEO and Co-founder, CoinDCX