Will Cryptocurrency Turn as the Savior to Indian Economy?

Will Cryptocurrency Turn as the Savior to Indian Economy?

With Yes bank running out of cash and sudden ban-lift on cryptocurrency, the country is perplexed of the present situation of its financial sector. It is certain that the banking sector plays a very crucial role in the country's economy. The Yes bank's inefficiency to raise the capital to combat the potential loan losses has brought the bank to a deteriorating condition leaving the entire country baffled. On the other hand, the Supreme Court lifts the ban that was imposed on cryptocurrency in April 2018.

With RBI's assistance, Yes bank is now stabilizing. Yet, the withdrawal limit is restricted to just 50,000 for each customer to meet their monthly expenditure. Alongside, this huge blow has greatly affected the retail investor with more than 3, 346 crore, as they hold about 43 per cent of stake in the bank. Furthermore, the bank's crumple has troubled its customers leading to trust issues. These financial crunches could be handled efficiently with the use of cryptocurrency. The global digital currency could be a substitute for the Indian rupees. In that scenario, crypto banking would evolve to play an integral role in the Indian financial industry.

Using cryptocurrency would aid in reducing the shortfalls that are presently encountered in the banking sector. Cryptocurrency primarily works on blockchain technology’s decentralized system which assures confined transactions eliminating the invasion of middlemen. Whereas the regular banking system involves a lot of procedures and paperwork, and the customer's transactions are usually restricted by the banks, according to their cash availability. This scenario is completely eliminated in crypto banking, as in this system money is not held by any entity but, it is seized in the cloud through the blockchain technology. Furthermore, the technology saves the information of every transaction and thus, makes the transaction transparent by eliminating any flaws.

Advantages of Cryptocurrency

Cryptocurrency minimizes the transaction charges. Usually, the transaction carried out through credit cards would impose some tariff on it. But, using cryptocurrency the transaction could be free of cost or incredibly low. The blockchain technology stores the transaction information in the digitalized form, thus, the system eliminates the involvement of intermediaries which would increase the transparency in the transactions and minimize the fraudulent activities that are most commonly encountered in the present banking system.

On legalizing cryptocurrency in India, Raj Chowdhury, CEO, HashCash Consultants states, "This decision could not have come at a better time, and the company is looking at boosting the Indian economy by expanding its operations, technology and infrastructure and incubating startups in the country." (Source: Inc42)

In addition, the cryptocurrency experts predict that the market is uncertain due to various factors that include coronavirus epidemic, global market crash, China printing money, negative interest rates and more. Despite all these hindrances, bitcoin, one of the most valued cryptocurrencies across the globe has increased its trading and reached $9,145. Thus, with the re-entry of cryptocurrency trading, Indian businesses could look forward to augment their operation which in turn would contribute in elevating the country's economy.