Indian investors are back. India’s cryptocurrency market is set to gain significant market share this year. The regulatory environment, the instability of the rupee, and remittances are key drivers that will send the Indian crypto industry soaring.
India is one of the fastest-growing crypto markets, gradually catching up on cryptocurrency development. Since March 5, when India’s supreme court quashed a Reserve Bank of India’s (RBI) circular that barred banks and other financial entities from providing services to virtual currency dealings, There has been a sharp increase in trading volumes on cryptocurrency exchanges in India.
Rising like the phoenix
The past two years were a nightmare for crypto exchanges in India. After the RBI’s decision in April 2018, the virtual currency ecosystem in the country nearly choked, leading to several exchanges, shutting shop. A few others shifted outside the country to survive.
But those who weathered the storm are now back in full swing. The high demand over the past couple of months has proved that Indians have an appetite for cryptocurrencies, and exchanges are planning to tap the market more efficiently. Reflecting its commitment to the country, Malta-based global exchange Binance, in tie-up with WazirX, announced on March 17 a $50 million fund to promote the adoption of blockchain technologies in India.
All this is great, but experts warn that there are still obstacles for cryptocurrencies in India.
Despite the supreme court’s order, some Indian banks continue to be reluctant to support virtual currencies. The reason for this resistance could be due to a lack of clear norms from the RBI as well as the anonymous and speculative nature of cryptocurrencies.
The RBI must intervene to reassure banks and clarify that they can support crypto businesses and trade, he added. Another hurdle for crypto exchanges to operate smoothly in India is the central government’s hesitancy, including the draft “Banning of Cryptocurrency & Regulation of Official Digital Currency Bill” (2019), which was floated in July 22, 2019 and suggests a ban on all virtual currencies in India.
Until the RBI and the government have a change of heart, the path for the cryptocurrency ecosystem in India will remain difficult.