The RBI or Reserve Bank of India’s unconstitutional stance on cryptocurrencies like Bitcoin, ETH and it’s closely relatable AltCoins diluted after the March 2020 Supreme Court ruling legalizing Bitcoin and other cryptocurrencies trading. With that said, you can trade in BTC and for the first time, BTC can be paired with INR at cryptocurrency trading exchanges. The after-effects have been showing a positive sign ahead as the Indian crypto market went on an investment rampage with trading volumes massively upsurging to more than 400 times standing at US$10-US$30 million on a daily basis.
Though cryptocurrencies have been subject to volatility and market risks, yet the verdict lays the wreath of a significant turnaround in Indian cryptocurrency and blockchain adoption. The digital India campaign could set-up an example by accommodating cryptocurrency trading and the Supreme Court’s revoking of the ban heralds a new future ahead in cryptocurrency trading.
How will the India Investment Market Shape with Bitcoin Trading Getting Legalized?
India is a sleeping giant in technology with over 820 million smartphone users having an Internet connection. In the absence of stricter regulations like KYC and bank compliances, the masses could well document their own growth script using the cryptocurrency for trading. Many banks are already integrating solutions where cryptocurrency trading transactions can be quickly converted into fiat, like a UK based banking platform Cashaa did in 2019 providing cryptocurrency to INR support with fee-free deposit and trading. Such support massively pushed the demand for cryptos during the coronavirus pandemic, when many individuals lost their jobs and with limited savings wanted a feasible option that was not affected by the pandemic and pre-occurring recessional sentiments.
At such times, cryptocurrencies powered by the DeFi projects have given better hope for these distressed population to tap interest in manifolds in comparison to banks. In some cases, the returns were as high as 20x to 200x, which is simply unprecedented, considering the entire economy worldwide had gone into a negative outlook. The ban-lifting massively injected funds in the economy during the pandemic phase as dipping taxation in the form of GST was choking it comprehensively.
As BTC trading has been legalized, the market could significantly gain from the recent PayPal release that supported trading in BTC using PayPal wallet. Traders now have a better option to invest in BTC and make significant earnings from the bull-run. With BTC pairing up with INR now at most exchanges, the transfer payment will be simplified motivating further investments and broadening the scope for adoption.
Paving the Way for Adopting CBDC or Central Bank Digital Currency & Blockchain Technology
Cryptocurrencies have a better chance to get injected to mainstream finance in India. Though the RBI had opposed adopting cryptos as a medium of exchange, the Supreme Court has compared cryptos to casino chips that act as a store of value, even though lacking fungibility. The government has been working on creating Central Bank Digital Currencies (CBDCs) to give tough competition since RBIs stance on the ban was to prevent an alternate payment method to emerge which could give an existential challenge to the banking system or dilute their influence. Having said that, the Indian Government is also aware of the challenges of not getting in line with technological transformation. Banning cryptos would amount to banning blockchain which has the potential to transform multiple sectors, which are devoid of growth due to legacy systems.
For example, the coffee business in India is the hardest hit sector with a lot of middle-men diluting the coffee standards from farm to fork. Integrating blockchain technology can make the sector answerable to consumers in their logistics and supply-chain movement. At present, prices for verification in fiat significantly increase the answerability charges for information. With that said, farmers are facing a significant draining of the revenues, but the blockchain is a decentralized open-source ledger technology that can simplify operations making validation and checking simple, less time consuming and economical. Some of the companies in the west in the insurance sector are likely planning for crypto-insurance where dynamic threshold limits can safeguard rapid price movements. As BTC and ETH trading has been legalized in India, the government of India will most probably think on similar lines since mass-scale demand of the population would call for actionable claims that are most likely to happen sooner at the executive and regulatory front.
The future looks secure for cryptocurrencies with top emerging economies like China, Japan, the US, the EU, and South Korea already expediting the process of launching their own CBDCs. Facebook Libra has already given stiff competition to centralized currencies and they would not wish to dilute their integrity & sovereignty. Having said that, BTC legalization or cryptocurrency trading legalization could establish better IT infrastructure in the Indian economy, allowing B-a-a-S services to emerge as the change makers.