India is one of the late adopters of cryptocurrency, with several complicated regulatory climates regarding crypto assets. However, investments in cryptocurrency projects in India have increased by 19,900% within a year despite all the hurdles.
Because of the growth in the cryptocurrency market in the past few years, and increasing adoption in many developed and developing nations, it was surprising that India as of recently was yet to legalize digital currencies fully. A government committee released a report in 2019 that recommended outlawing all private cryptocurrencies, with jail terms ranging from 10 years to life imprisonment and hefty fines for anybody who deals in them. In March 2020, however, the Supreme Court overruled RBI’s regulations, which had forbidden banks from accepting digital currencies from dealers and exchanges.
Gold obsessed Indians are spending billions on cryptocurrencies
According to a report from Bloomberg on June 28, Chainalysis a blockchain analytics firm, released a report that said in mid-2020, the cryptocurrency markets in India experienced a market surge to record high numbers. The estimate from the firm showed that crypto investment in India increased from $200 million to $40 billion within a year. This means that an estimated number of 15 million Indians are familiar with cryptocurrency.
This surprising change in events in India has been linked to the lift of the ban by the supreme court on financial institutions, which now allows banking services in the country to operate with digital assets. The decision taken by the Indian supreme court in March 2020 has undoubtedly been a major contributing factor to the increased interest in crypto investment.
However, the battle is not yet over, with Indian lawmakers frequently threatening new legislation prohibiting crypto assets in the last 15 months. The government regulates digital currencies in India by allowing a bit of freedom for people to invest and trade. However, there is talk of a tax charge of 2% that might be added to transactions on exchanges outside the country in the future.
In spite of all of the regulatory fights occuring, the fact that India’s cryptocurrency market is continuing to grow at a blistering pace is great news for the entire world. We’ll keep you updated as the story unfolds.