Is India ready for Cryptocurrency?

Is India ready for Cryptocurrency?

The Supreme Court had upended a prohibition, in March 2020, on banks barring them from offering financial services to businesses managing crypto assets that had been enacted by the Reserve Bank of India in July 2018. Before making cryptocurrency conventional in India, some challenges needed to be set on.

According to a report by CoinDCX, more than 11,300 participants were surveyed virtually, included 3,512 of its customers with the majority of 25-35 age group participators. It disclosed that survey respondents consider the crypto market in India is dotted with challenges and there is still no easy getaway to enter this market, despite the hype. 

Legal and regulatory challenges                    

In spite of being a highly populated country, only one per cent of India is accountable for the daily volume of the crypto market. The survey showed a possible reason behind keeping the Indian crypto traders and investors back might be regulation.

It also states that the lack of knowledge about legal and regulatory in the country made the investors keep their step back. As 60% of the respondents, earning under the range of 5 lakh per annum, said that crypto markets have lack easy and flawless options. Another 68% of respondents, earning above 10 lakh per annum, shared their sentiment. All in all, respondents referred to the obscurity of legal and regulatory as a key concern for considering crypto investments. 

Other categories’ respondents, such as undergraduates, banking employees, respondents older than 40, and real estate investors, also act in response that regulations are a concern.  

“While outwardly India is set to become the next global player on the international scene, it is extremely important that smart and sensible regulations become a part of the discourse,” Sumit Gupta, CEO and co-founder of CoinDCX said.

Other obstructions to crypto adoption

The Cryptocurrency Industry is indeed rising but there are other obvious challenges. Graduates and respondents of age group 20-30 years, encountered “knowledge and education” about crypto is the major obstruction to its implementation. Many of them believe that the existing industry leaders are certainly not interested to educate the masses.

In the opinion of the experts, the leading bourses have got to invest in community education about different cryptocurrencies. They need to provide a clear guiding principle for the investor in advance. Each cryptocurrency exchange that is expecting long-term growth, should involve the governing body and their moderating agencies. This will assist them in procedure the process like any other business sector with absolute lucidity.

In spite of that, cryptocurrency is at the gunpoint of cyberattacks, it is clear because hundreds of attacks have happened in the last few months.  These hacks compromised people with hundreds of millions of dollars.

Even though exchanges are taking extra finance for the safety purpose of their funds, crypto is at the mark of ransomware and crypto-mining attacks making people unenthusiastic to use these Cryptocurrencies.  

“The current trust issues with the retail trader and investor in cryptocurrency can only be solved if an insurance company offers some insurance for the digital asset. At the same time, if any insurance company will offer insurance for the crypto wallets, that will bring standardization and scrutiny for crypto enthusiasts,” Advocate PM Mishra stated in an interview.

Growth is predictable

Despite assigning complaints via various crypto companies that the banks are hesitant to work with them, India’s digital currency segment has long-drawn-out in the last quarters. In spite of, Cryptocurrencies have been under scrutiny ever since its inauguration, Bitcoin has seen incredible growth in a short period. In the early week of March 2020, Bitcoin had crossed the 14 lakh benchmark in India. 

Since the investments were reliant on multiple aspects such as geographies, demographics, markets and economies, COVID-19 certified major asset classes viewing contradictory deeds. Moreover, Sumit Gupta declared that Bitcoin was not much affected as it is indifferent from the cryptocurrency and is only based on supply and demand. Addition it is a result of blockchain technology, one of the securest sources of digital money security.

Diwali season of 2019 had different elevated, as of reports of sponsors replacing gold with Cryptocurrencies like Bitcoin and ethereum on Dhanteras and Diwali days.

Whereas 12% of respondents from the banking industry mentioned that they have possessed crypto assets. Some affirmative statement of 22% says that virtual currencies are a strong substitute investment. This indicates that virtual currencies could be a growth segment in the country.

The Internet and Mobile Association of India is already in discussion with government officials as well as regulatory bodies. They are in the process to draft out a regulatory framework under which crypto trading can be done legally in the country. A draft version of a code of conduct for crypto traders is expected to be ready, with KYC as well as requirements against money laundering. 

Financial divisions like Mastercard and PayPal have already initiated their networks to Cryptocurrencies.

The requirement of the phase is optimistic guideline so that the ecosystem is clean and gets more start-ups to a procedure in the sector of blockchain, more employment, and growth in tax revenue for the government. As Kashif Raza, Co-founder of Crypto Kanoon, a platform for clearing regulatory ambiguities in crypto said, there should be a strong ecosystem to erase the distance between the crypto community and people who want to be a part of this community.